Industrialization, technology and employment in the People's Republic of China

DTDUST?=ALI ZATON, T3CETOLOGY ND MPLONT DT TEW PEOPLIS U?UBL7C OF CINA by Thomas G. Rawski Se ries : S tuåies in Employment and Rural Develoment Näo. 4 i:poymet and Rura! Develcprpnc Devart=ent: Developmenz Eccnomics DevTelop=ent 23c.c7 Staff Itrnational Bank for Reconstuction and Develop=Snt Me authozr Drerartd is backurcund paper in his zauacit7 casu-:aä- :o 73ank. he vws e ssd resen Os u:hrandt -cjeesri" hs f :l- nac,=i eor a 2:h a c;sh-dc r :2ayj -: ýe gca srpee:n h ese h Sn aZi- t n I. . --a: a ~9 -- -' ý - . 27. INDUSTRIALIZATION, TECHNOLOGY AND EMPLOYM NT IN TIM PEOPLE 'S REPUBLIC OF CBNA Table of Contents 1. Introduction p. 1 II. Trends in the Size and Sectoral Distribution of China's Labor Force, 1957-1975 p. 12 III. Deta=nants of Industrial Employment p. 40 IV. Rural Labor Absorptio-, 1957-1975 p. 84 V. Conclusion p. 136 Appendix A p. 156 - Notes p. 163 References p. 173 Note on Units of Measurement and Abbreviations One mou, the Chinese unit for land area, equals .0667 hectare or .1647 acre. Tonnage figures are given in terms of metric tons. GVIO = Gross value of industrial output ,IC = million metric tons In preparing chis report, my primary obligation is to Alice S. Y. Chan, whose diligent efforts uncovered much of the detailed information contained in the following pages. I am also grateful for financial support from the University of Toronto - York University Joint Centre on Modern East Asia. The following individuals and organizations generously provided me with bibliographic assistance, unpublished research materials and good advice: John Aird, Kang Chao, the Committee on Scholarly Communications with the People's Republic of China, John Philip Emerson, Thomas Gottschang, Ramon Myers, Dwight Perkins, Evelyn Rawski, Peter Schran, Benedict Stavis, Anthony Tang, Joseph Whitney and Bobby Williams. p b 1 He ilungkiang Kirin Sinkian t Liaoningj nner Mongolia Hopei i C- hans Shantun T singhai - Kansu j.. xShensii. Honan J S Kiangsu A,'nnweiTi Hupel bekln Tibet szechwan chein «iHunan Kwelchow i, 7L? Yunna Tawan Kwangsi - Kwangtung ProinciaL Map of China Chap ter One Tntroduction This report studies the relationship between economic growth and employment in the People's Republic of China. Quantitative measures presented in Table 1.1 describe China's recent progress along the path of modern economic growth. Aggregate and per capita product have grown at rates which are not exceptional, but do exceed the world LDC averages computed by Kuznets (1972) by a considerable margin. Extensive structural change has pushed industry ahead of agriculture as the largest contributor to total output. Increased domestic savings and production of capital goods have raised the investment ratio far above the 57. levels observed prior to World War II. Massive output growth in energy, metallurgy, engineering and other basic industries has enabled China to supply most commodities needed to support economic expansion, but foreign trade has nearly kept pace with total output, allowing the external sector to make an ongoing contribution to the development of China's economy. QuAlitative changes are less easily documented, but have been of equal significance. Chinese mastery of modern technology has grown enormously. A nation which could not manufacture tractors, power plants or rist watches has now developed the capacity to produce computers, earth satellites, oral contraceptives and nuclear weapons. Nor are new technical skills confined to a thin layer of isolated urban enterprises. The expansion of rural electrificaion, local industry, education and -ublishing has brought =cdern ekchnological knowled7e to the doorstp of =os= oF hlina' 13 ms L6ca-ouse- hols. C uran: an=oLMent of '5 0 :r o priar - 75co scCaen:s CasUres :Ma 2 - Table 1.1 Ladicators of Chinese Economic Development, 1952-1974 1952 1957 1962 1965 1974 Av. Annual Growth Rate 1952-1974 1.GDP (Billion 1957 yuan) 70.41 104.68 108.29 10.64 226.24- 6.2% Commonents (shares in GDP) Agriculture 32.15 44.72 35.30 49.10 67.09 3.4 (45.7) (42.7) (32.6) (32.6) (25.2) Industry & Transport 19.31 34.16 45.67 64.60 138.84 9.4 (27.4) (32.6) (42.2) (42.9) (52.1) construction 1.48 4.0o 4.48 8.00 13.96 10.7 ( 2.1) (3.8) (4.1) (5,3) (5.2) Services 17.47 21.80 22.84 28.94 46.35 4.5 (24.8) (20.8) (21.1) (19.2) (17.4) 2. Population (July 1), Mill. 571a 641 704 746 916b 2.2 3. GDP mer Capita (yuan) 130.15 163.30 153.82 201.93 290.66 3.? 4. Gross 74ixed Caoital For- c 1 c naton Bil. 1577.70 19.52 20.92 35.46 68.01 10.9 =ation (Bill.'1957 yuan) -. 5. GCF/GDP (%) 10.9 18.6 19.3 23.5 25.50 6, Urban Retail Price Index 100.0 109.1 118.4d 115.6 7. Outmut of Major Commodities Grain (MMT) 154.4 185.5 174 200 259e-265 2.4-2.5 Coal (T) 66.5 130.7 180.0 220.0 389.0 8.4 Ingot Steel (MMT) 1.3 5.4 8.0 12.5 23.8 14.i Zlectric Power (Bill. kwh) 7.3. 19.3 30.0 42.0 108.0 13.0 Crude Oil (M) 0.4 1.4 5.8 10.8 65.3 26.1 Machine tools (thousand) 13.7 28.3 25.0 45.0 80,0- 8.4 Cotton Cloth (Mill. meters) 38 5.0 3.5 6.4 7.6 3.2 .8. Foreign Trade Turnover 1.8 3.0' 2.8 4.0 6.0, .7 (Bill. 1963 US) Exports 0.8 1.3g 1.6 2.2h 2.8 6.0 Imports 1.0 i.74 1.2 1.9 3.2 . 3 Table 1.1 continued -Sources: Line 1: Perkins (1976a, p. 16). Line 2: Aird (1974, p. 23), Line 4: Field (1977, Table IV-19). Line 6: Perkia (1975a, p. 153). Line 7: grain data from Wiens (1977, Tables 11-1 and 11-12); other data from Field (1975, pP. 165-7). Line 8: Eckstein (1977, P. 246), a a% less than figure for July 1, 1953. b 2% more than figure for July 1, 1973. GFCF estimate is for 19734 growth rate is for 1952-73. Data are far 1963 and 1971 respectively, ePerkins (1975b, P. 351). fU.S. Central Intelligence Agency (1976a, p. 1). Data are for 1955. hData are for 1966. 4 the distribution of knowledge will continue to broaden and deepen. Recent experience in many developing countries shows that progress toward industrialization often fails to provide adequate emloyment oppor-unities for broad segments of the labor force. With its huge and thickly clustered population, China has a long history of massive unemployment problems. In addition, the concentration of resources on a small number of capital-intensive industrial projects which formed the core of China's First Five-Year Plan (1953-57) produced a classic pattern of rapid output growth combined with open unemployment in the cities and seasonal idleness in the countryside. Chinese and foreign accounts agree that urban unemployment was a severe and persistent problem throughout the 1950s. Rapid growth of labor requirements could not keep pace with a supply of job-seekers swollen by masses of peasants who flocked to the towns in response to bad harvests or to news of jobs in new construction projects. Chinese reports of this period regularly mention unemployment figures running into the millions. Over the twelve year period ending in 1960, C. 'M. Hou finds that the average of yearly unemploymenc. rates for non-agricultural male workers was at least 12% and perhaps over 25% (1968, p. 369). !a the countryside, excess labor supply led to widespread seasonal idle- ness both before and after 191-9. Peter Schran finds that the average peasant worked only 119 days per year during 1950-53. Formation of farming cooperatives during 1955-56 raised the average to 160 days, and full collectivization resulted in a further rise to 189.0 in 1959. Even the intensive mobilization ef:orts associated with the Great Leap Forward (1958-60) failed to _pproach the norm of 250 annual work-da7s used by Chinese econcmiC planners. Deso:e~hi: ;.iI=*-ran an-4rra eI'-=en: _rbMs zi.a leaders developed ambitious plans for moving the economy toward full employ- ment. Urban unemployment would be curbed by accelerating the rate of industrial growth, transferring idle urbanites to rural units, and strictly limiting peasant migration to the cities. At the same time, collectivization and technical development of agriculture would enlarge rural employment opportunities. Here, targets were spelled out in detail: I= the sevel years starting from 1956, every able-bodied man in the countryside should be able to put in at least about 250 working days a year. The labour power of women should be reasonably arranged. . . .every able-bodied woman in the countryside should, apart from time spent on household work, be able to give no less than 80 to 180 days a year, to agriculture or sideline occupations (The National Program for Azzicultural Develommen:, 1956-67, reproduced in.Kuo 1976, p. 276). As we will see in Chapter Four, realization of these objectives came only in the wake of two changes: One was the emergence of well-managed agricultural collectives, the people's communes, as a vehicle for organizing the work force to undertake water control and land improvement projects on a scale beyond the capabilities of the family far=ing system. The other was the use of large quantities of industrial products to break seasonal labor bottlenecks, raise the supply of irrigation water and plant nutrients, and generally facilitace the intensification and diversification of agriculture. The policies of the Great Leap Forward (1958-60) included efforts to supply agriculture with industrial products from small-scale plants, as well 9 as massive application of labor power to irrigation and Land imrovement projects. These attempts were premature, and largely unsuccessful. The hastil7 built small plants lacked technical and macerial foundaCians; their produc:s were utan useless. S0ur-of-the-=O=en= Dsrucci pro'ec:s s~:eecSi:2j_a=1> _'roZM 10W tech=iza. aid.:e~--~ :-u::e a. 6 went overboard in transferring farm workers into industry or construction brigades; and caused Tabor shortages and reduced harvests. During the early 1960s, rural economic policy concentrated exclusively on the vital task of restoring China's foodgrain economy. With this accomplished, the initiatives of the Great Leap "ere renewed, but now in an atmosphere of careful planning, controlled experimentation and sound commune management. As the pace of winter works campaigns and flows of manufactured far inputs accelerated, rural labor demand began to rise very much as anticipated in The premature plan documents of the mid-1950s. Beginning in the late 1960s, and continuing into the 1970s, we find considerable evidence of high employment levels and sharply reduced involuntary idleness in both urban and rural areas. Accounts by foreig: visitors are filled with evidence of high urban and rural employment. The only exception comes from reports that as many as several million youths assigned to rural areas may have illegally returned to their urban homes (see Chapter Five). In cities, visitors are told that factories experience difficulty in recruiting workers. Daytime gatherings of idle young men, a comon phenomenon in cities of the industrial as well as the developing world, are not encountered in China. This visual evidence and the high participation rates reported for some cities (Chapter Two) suggest high urban e=ploment for the 1970s. In rural areas, visitors are surprised to hear of labor shorzages rath er :Han su=pluses. Coune offiials emphasize the need for increased mec"anizazion. The Whese Scudies delegation found :ha: in 16, elI oiials insis:ad :ha: :"ere was no labor sur:1us. Ins:nd :Say expressed concern about labor shortage, at least during the transplanting and harvesting seasons" (Schran 1976, p. 11). Visitor accounts, even those of specialists whose language ability allows them to converse with people other than official guides and spokesmen, leave much to be desired. Visitors are taken to outstanding units. A U. S. Wheat Studies group, for example, toured ten units at which the minimum 1975 wheat yield was 2250 kg. per sown hectare, or almost two-thirds above the national average for 1972. The average 19'. yield at the ten units visited was 4529 kg/hectare, or 3.3 times the 1972 national average (Wheat Studies 1976, Appendix 5; Myers 1977, Table 1). Almost every agricultural unit visited by the U. S. Rural Small-scale Industry Delegation in 1975 has since received major publicity in the Chinese press for outstanding economic achievements. Furthermore, visits to China are brief and often rushed. Foreign guests receive tightly scheduled itineraries which often leave little opportunity for detailed inquiries into the affairs of individual units. Evidence of high Aloyment levels in the 1970s, however, comes from Chinese as well as foreign accounts. Chinese materials reveal an enthusiasm for mechanization in all sectors of the economy which is hardly consistant with widespread unemployment or underamloymeat. The following examples typify thousands of positive reports about mechanization in urban and rural industry, services and agriculture: in 1969 LShihchiachuang (Eopei) Rolling Stock Works] made 12 pieces of pneumatic equipment to mechanize the main work liae. ?erscnel dropred by one-third and productivity doubled. (C0? 1223 (July 1971), p. 20). cek workers a: the ChM ihuang:ao i :arbor 3ureau made large-scale zoal loaders. This lini aced heavy u a-_d -:ased ork -WOinc. over :em-:o1. (;CTl 11. (August 8 Cigarette machines at the Kunming Cigarette Plant increased from 3 to L4; packing machines from 2 to 20. Because of the continuing increase in mechanization, heavy labor was reduced and productivity soared (CCT 1398 (1974), p. 18). Local industry in Fukien's Yung-ch'un County is developing rapidly. About 90% of the county's farm and subsidiary products are now processed by machine, saving 1.1 million man-days QCT? 1177 (July 1970), p. 23). Because Red Star Commune (Peking) has basically realized agricultural mechanization, electrification and water conservancy, it has been able to spare more than 2,000 laborers and assign them to diversified economic undertakings. . . .as shown by Red Star, agricultural mecha- nization, electrification and water conservancy makes it possible to spare large amounts of manpower for developing a diversified economy, thereby. . .increasing the incomes of commune members (Wang Kuang-wei 1963, pp.6-7). The mechanization of agriculture can greatly raise agricultural labor productivity and thus make it possible for a large amount of Labor to be saved in favor of the advance along the depth and breadth of production (EM! 401 (1964), p. 37). Agricultural mechanization is no doubt the center of agro-technical reform. It signifies the level of agricultural productivity, and abundant forces must be made available to carry it-out actively. But it should also be perceived that the most prominent role of agricultural mechanization is to save labor power (ECMM 409 (1964), p. 37). Chinese writers are well aware of the direct impact of mechanization on labor requirements. They welcome the labor-saving impact of machinery. Their reports do not contain persuasive arguments aimed at opponents or new 1 equipment because they evidently expect readers to share their views. The rapid increase in stocks of rural machinery, most of which are purchased by communes and brigades from collective funds, also points to the popularity of mechanization, as does information showing that machinery is used much more intensively in China than in other countries.2 China's unizue ?rogra .f conogcri=tifg zrban school grad,.azes :Z) =-iaza :o :.e zou7:=iside provides add4:onal evidence :"at :-e denand L zor cazncc fall far shor: of available suzppl, ?easanzs sometizes oocse settlement of urban youths in their local units, but rural hostility to newcomers arises not because there is no work to be done, but because urban youths are weak, unskilled, and often unwilling to take on the gruelling physical labor required of China's farmers. Reports of difficulties encountered by the program to "rusticate" urban youth reveal that employment standards of the 1970s are much higher than those of the late 1950s: After. . .study, the educated youths Csent to Chi County, Hopei] made encouraging progress. In 1972, each person worked an average of 269 days, 64 days more than in 1971. Under the tutelage of the Party, the work attendance of the educated youths in this comune L4uai-te County, Kirin] increases each year; the boys and girls on the average each reported for work 225 days in 1970, 245 days in 1971, and 267 days in 1972. The youths in the countryside say, "Ch'ien-ying LFeng-jung County, Hopei] is our home, and the poor and lower-middle peasants are thus our family." In the past eight years, they have spent every Spring Festival with the . . .peasants of Ch'ien- ying. In 1972, every person participated in 300 days of labor on the average (Seybolt 1975, pp. 24, 38, 54-55). Nationally, A new regulation was also apparently put into effect in 1974 requiring communes to guarant2e urban youths a mini=m annual wage of 200 yuan, provided they worked for at least 250 days per year. No job at the team or brigade level exampts the incumbent from manual labor. . .The brigade party secretary and chair=an of the brigade's revolutionary committee used to be exempt on a half-time basis, but more recently the demand has been voiced that brigade cadres should work 300 days oer year. Commune oEficials do full-time administrative work, but they too should, according to the orinciple of cadre participation in labor, labor in the fields, formerly for at easc 50 days; more recentv7 :or 200 days (1.r9s7ein 1D7, pp. 153, 325-326). None :f -_-ese s:_:ze-z3 T-ake s se7nse ni a "---eaza =ow z> . 10 far more than the 190 work-days estimated for 1959 by Peter Schran. Leaders of production brigades with roughly 1,000 members can be expected to contribute more manual labor than peasants with no administrative duties. Our limited knowledge of the demographic structure of China's population makes it difficult to define rural full employment with precision. A rough approximation is possible if we assume that the age and sex distribution of the present rural population resembles the 1953 national census data.3 I the primie labor force members, men of age 15-54 and single women of age 15-25, are assumed to work 330 days per year (assuming ten day holidays at New Year and the Spring Festival and 15 additional days for rest or illness) and the secondary labor force of housewives aged 25-54-and men aged 55-64 is assumed to work 80-180 days per year, the range mentioned in the National Program for Agricultural Development cited above, then on the average, members of the labor force would contribute 240-275 work-days per year. The present age structure of the agricultural population may, of course, have shifted. But in any case, these rough calculations show chat an average work-year of 275 days represents extremely high utilization of rural labor. In sum, visitor accounts, rapid.machanization, and high labor attendance rates for rusticated youths and low-level rural officials all point to the hypothesis that China has succeeded in sharply reducing the level of urban unemploymenc and rural undere ployment during the past evo decades. The ou=ose of this report is to compile and analyze available macerfals on the changing size and seczoral a:tachment o China's labor force, anc :t study :he i=pact of econcic growth ar.d ect'oni poz on :Se suppy7 and demand for labor. The foUzlwig chancers seek :o de-r-i th _iesi of China's achie'vements in the sphere of employment and to explain the mechanisms which have caused employment opportunities -o rise and unemoloyment to decline. Chapter Two Trends in the Size and Sectoral Distribution of China's Labor Force, 1957-1975 In this chapter, we trace developments in the size and sectora. attach- ment of China's labor force during the past two decades. The limited quantity and controversial nature of Chinese demographic data obliges us to begin with a brief survey of population statistics. Fortunately, the trends which emerge from the following analysis are not crucially affected by the outcome of disagreements among demographers concerning the precise size of China's population. Population A. Total population The size of China's population has been a controversial issue among demographers for many years. Recent reports of remarkably low brith rates and rates of natural increase emanacing from individual urban neighborhoods, rural communes, major cities and in some cases, provinces have heightened the interest of outside observers in obtaining accurate information about the size 1 of China's population. Unfortunately, detailed population data have not been published by the Chinese authorities since the late 1950s either because they prefer not to publicize this information or, as suggested by a remarkable interview granted by Deputy Premier Li Hsien-nien, because ?eking itself does noc possess good estimates of total poulation.2 Available populatia figures from Chinese sources are s'how-a in :aba 2. The daca for the 1950s are based on the populacion census of 1953 and are 7-e _f*=,=s "196o-:1 ant' 1972 appear :0 *-e -=aeaso:iably s=a1': ielther zasa ha-,-e ou_,:si4ezs 'been able 7_o _5a7.a-n :::a 13 Table 2.1 Pooulation of the People's Republic of. China (ai-lions; as of Jan. 1) Tear Chinese Aird Sources ztimates 1953 575 576 1955 602 603 1.957 628 633 * 1958 646 648 1960 .. 679- 1964 680-713a 723 1965 *00 738 1970 ... 827 1972 686-690b 867 1974 909 1975 ... 931 1976 8660 953 Source: except as noted, Aird (1974), pp. 6, 8, 11, 22. aThese data represent rumors concerning the possible outcome of China's 1964 population investigation. See ibid., 6. bThese data are from a Chinese atlas published (in two editions) in 1972. See ibid., 8. c" CThis is the sum of provincial fig=res released du=ing 1975 and 1976 collected by John S. Aird. Most off these provincial figures are shown in Curent Scene 1.112. (1976): 18. d Aird's population series shows an increase of 2.4% during calendaz 19'3 (1974, p. 22). Figures for 1975 and 1976 are obtained by assuming a continuation of this 2.4% rate of increase. The 1976 figure is obtained by suming recent reports of provincial population totals. While these figures are generally plausible, comparison of the latest provincial data with 1957 populacions reveals several cases in which the recent provincial reports appear to contain substantial under- counts. Szechwan (1957 population 72.2 million) and Eunan (1957 population 3642 million), for example, now report population figures of 80 and 40 million respectively (based an reports of Seltem-er 1976), implying average annual growth rates of only 0.71% and 0.54%. since 1957. These results are extremely difficult to accept, particularly since neither Szechwan nor Eunan is cited as a model province for birth control work,*while Kiangsu, which is cited as a model province, now reports population totals implying an average populacion growth rate of 1.51% since 1957 (provincial data supplied by John S. Aird). in view of these indications that the population totals derived from Chinese sources understate actual conditions during the 1960s and 1970s, Table 2.1 also includes a population series estimated by J. S. Aird. These figures, which were compiled prior to the recent release of provincial population figures, are consistent with the provincial figures once upward adjusrments are made in the data for several provinces, including Szechwan and Hunan, for which the recent figures appear to contain substantial undercounts. Aird's figures appear more likely to provide accurate estimates of China s population than the lower figures published in China. In any case, it will be shown belcw that the major conclusions of th-s zHanter are valid for either sac o populacicn figures. 15 B. Urban and rural population In view of China's Policy emphasis on rural development, with its sharp contrast with the urban-oriented thrust of official policy in many LDC's, it is important to obtain some rough quantitative indicator of recebt trends in urban population. Chinese literature of the 1950s provides the following definitions of urban areas. All urban agglomerations with 100,000 inhabitants or more are municipalities or cities. This classification may also be applied to smaller urban centers which are important industrial or mining areas, seats of important administrative or transport activities or key centers of frontier regions (Ullman 1961, p. 2). Taus are smaller than municipalities; they are urban agglomerations with 2,000 inhabitants or more, of whom at least half are engaged in non-agricultural pursuits. Places with populations of as little as 1,000 persons may also become towns if 75% of the.populace is nonagricultural and if they are centers of non-far economic activity (Ullman 1961, p. 6). Urban places are therefore agglomerations with populations of over 2,000 (and in some cases, 1,000) of whom the majority are engaged in non-far= pursuits. In 1953, the total population of China's 164 municipalities was 52.6 million, of which 83% was urban and 177. rural (farming population of city suburbs etc. - Ullman 1961, p. 2). The total urban population was 77.7 million (ibid., p. 7). By 1958, the number of municipalities had increased to 135, and their combined population had surpassed 70 million (calculated from Ullan 1961, op. 35-6). Total urban population had reached 92 million by the d z: 1957 (ibip., p. 7), and cer:Silyr surassed 100 -illion durizg 958.3 0 1 :7 S a:etea:s e-11"aizi r_2rial d,- e : ar.d z Ha -weI. - c u b iza 'ro'zra zU130- :mi'_nzon me eOnr 4::r ~ran asc.hc. aza: es 16 has created the impression that urban growth has slowed or even halted during the past two decades, This is not the case. Data for 40 cities which accounted for 41.1% of the population of China's municipalities in 1953 indicate a population growth of 45-67% between 1958 and 1974.5 Furthermore, statements such as the following indicate that smaller urban areas have also expanded, perhaps more rapidly than the larger cities for which published reports can be compiled: China has built up many small cities and towns in outlying and sparsely populated places, in the interior and in border and minority nationality areas which now have their own industry. The capitals of many provinces and autonomous regions and many county seats have become industrial cities of varying sizes. . . .New China puts stress on building small and medium cities (BBC W899 (1976), Al). Further indication of urban growth comes from the appearance of new cities: only 13 of 29 cities described in a 1974 volume on "Newly Brilliant Cities of the Fatherland" were listed as municipalities in 1958.6 The conclusion of this survey is that China's urban population had increased by 1975 to a minimum of 150 million from the 1957 figure of 92 million mentioned in Chinese sources. The share of urban dwellers in the total population, however, has increased very slowly, indicating a large measure of success in limiting migration co the cities. C. Participation rates Urban Howe (1971a, p. 44) has collected employment rates for four urban areas during the late 1950s. These are shown in Table 2.2. When weighted by 1958 populations, the average rate for this small sample becomes 33.3%, which is close to the national figure of 32.5% cited by .-cwe. Raduc:ions i*n ibam _,ne=',ovme=-., a- saricus 7:rcbeI _4uiZ1' :He 17 Table 2.2 Da7loyed Population as a Percentage of Total Pmpulation, Late 1950s Region Zmployment 1958 Rate (W) Population (thousands) Canton 25.0 1867 Lus hun- Dair ea 32.5 1590 Nanking-Wuths 1 33.2 2071 Slanghai 35.8 6977 Weighted average of above citations 33,3 National (1956) 32.6 Source: except as noted, Lowe (19711 p. 44) and Ulman (1961, pp. 35-6). aWeighted average using 1958 pomulation weights. repeated campaigns to resettle unemployed urban dwellers in rural areas, and increased employment opportunities for urban women in neighborhood industries appear to have raised urban employment rates considerably above earlier levels. In 1974, 3 million of the 5.7 million residents of Shanghai city were employed, indicating an employment race of 52.6% (BBC W792 (1974), A4). In Lhasa, Tibet, one-third of 100,000 residents are industrial workers (BBC W899 (1976), ,2). The Shanghai data make it quite likely that well over 40% of China's urban dwellers are now employed. Rural Rural employment rates are difficult to measure. First, Chinese communes do not appear to use a clear and consistent definition of "labor force"; when questioned by visitors, hosts at Chinese communes cannot explain what precisely is meant by statements such as "the commune has a population of 55,000 and a labor force (lao-tung-li) of 22,000."9 However, a number of such encounters leaves the i=ression that "labor force" refers to persons who regularlv earn work points (used to compute year-end distribution of collective income) in collective activities, and that occasional participants, such :s housewives, old people and students who may work only during the peak of the harvest season, are not included in the rural "labor force." Second, although open unemployment does not appear to have been part of the Chinese rural scene either before or after 1949, "employed" persons can work more or fewer days per year. Indeed the average number of days worked by farmers appears to have risen gradually during the 1950s and more rapidly thereafter (see Chapcer Four). Despite chesa ncer-ai:ces, availabia da:a -n 'abor forze" as a :e=ce:atze of :-aral Dovul2ce consist ~ain :,zrne_:r zhean,7e Peter Schran used 3uck's survey data of the 1930s and concluded that both in the 1930s and in the early 1950s, the share of ePloyed persons in the peasant population was 45.8 - 47.6% (1969, p. 53). Sa=ple surveys of 1955 and 1957 suggest that 45 and 43% respectively of cooperative members were employed in cooperative production, with another 5.5 e=loyed in subsidiary production alone (1969, p. 57). Vigorous mobilization of labor during the Great Leap years (1958-60).may have raised participation rates slightly (ibid., p. 61), but such increases were probably temorary. Burki's report of a 1965 survey of 13 communes showed that 40.2% of the 287,111 inhabitants were classified as "able-bodied workers." In addition, one, and probably more of the communes had released workers to urban emloyers; these were not counted in the commune's labor force, but apparently were counted in the population, thus imparting a downward bias to the overall participation rate (Burki 1969, pp. 50-97).10 Data collected by the Rural Small-scale Industries Delegation in 1975 and presented in Table 2.3 show participation rates for communes and brigades which fall between the figures found by Schran and Burki. Data for two counties give rates slightly lower than 40%. These data may also contain downward biases due to temporary migration of commune mebers to nearby cities, a possibility which is especially likely in the sururban communes located in the heavily industrial regions near Wusih and Shanghai. These rather scrappy data give the i=ression of Little change in rural participation rates since the -id-1950s. On the basis Of Schran's s-udv of che 1950s and the 1975 data for cc=unes and brigades obcained by Rhe zural mall-scale Izduscries grou=, sha_ assume cha: rural labora rates 'ave reai4ed steady ac apprrx-nace-7 5% si=ce - 20 Table 2.3 Population and Employment in Selected Rural Areas, 1975 Population Employment Participation Rate A. County data Ezi-yang (Shansi Province) 200,000 78,000 39.0% Wusih (Eiangsu) 900,000 350,000 38.9 County total 1,100,000 428,000 38.9 B. Commune and Brigade Data ShiLh-pln Brig (Hsiyang) 1,970 640 32.5 An-p'ing Com. (Hsiyang) 10,000 3,800 38.0 Kao-chuang Comm. (Hui, Honan) 42,000 13,000 30.9 Ch 'i-li-ying Com,une (Esi-hsiang, Honan) 55,000 30,000 54;5 Yang-zhih Comune (Wuzih, Kiangsu) 22,000 10,500 47.7 Mei-tslun Com=. (.usih) 38,817 10,200 33.1 Ho-lei Comm. (.Vusih) 15,002 7,000 46.7 Mta-lu Com=. (Chia-tiLng, Shn.anghai) 28,000 18,000- 64.3 Comune & Brigade Total 204,789 93,140 45.5 C. Total Aor , and 3 1,304,789 521,140 39.9 Source: Author's trip notes as a member of Rural S.a.l-acale ndustries Delegation, June-July 1975. 21 D. Labor force The above discussion enables us to construct estimates of China's urban, rural and -overall labor force for 1957 and 1975. The results avpear in Table 2.4. In this table, approximate urban populacion figures and rural and urban participation rates are based on the previous two sections of this chapter; rural population is derived as a residual. Urban unemployment for 1957 is estimated at 6% of the urban population on the assumption that half of the increase in urban employment rates between 1957 and 1975 was due to reduced involuntary unemployment while the other half was due to institutional changes which created increased employment opportunities for women previously outside the labor force. Following the discussion in Chapter One, we assume no mc than 1 million urban unemployed. in 1975 and no rural unemployment in either 1957 or 1975. Using these assumptions, two sets of labor force estimates are derived from the alternative population series shown in Table 2.1. Version A, based on Chinese population figures, shows that the labor force increased by 105.4 million, or 38%, between 1957 and 1975, and that 70% of the increment occurred in rural areas. Version B, based on Aird's population figures which, it will be recalled, are thought to be more realistic than the Chinese figures, shows a larger increase in labor force of 139.6 million, or 50% of the 1957 figure, during 1957-75, of which a larger share, 77.4%, occurred in rural areas. It is important to note that while the results derived in Table 2.4 are based on a variety of assumptions, some of which undoubtedly contain significant errors, the following conclusions emerge very clearly from the data and are not sensitive Zo :e `-nacz : indirivdual asspt=rizns underling :he alcula:ors 22 Table 2 ,4 Alternative Estiates of China's Labor Force, 1957 and 1975 (mi.llions) Version A Version 3 1957 1975 1957 1975 1. Total population 628 850 633 931 2. Urban sector: population 92 150 92 150 % employed 33% 45% 33% 45% 3. Rural sector: population 536 700 51 781 % employed 45% 45% 45% 45% 4. Labor force Urban employed 30.4 66.5 30.4 66.5 Rural employed 241.2 315.0 243.4 351.4 Urban unemployed 5.5 1.0a- 5*5 1.0a Total labor force 277.1 382.5 279.3 418.9 5. Increase in labor force, 1957-75 Increase La urban labor force 31.6 (30.0%) 31.6 (22.6%) :ncrease in `ural labor fforce 73.8 (70.0%) 108.0 (77.4%) Increase in total labor force 105.4 (100.0) 139.6 (100.0) Sources: Tables 2.1, 2.2, and discussion in the text. ar i11egal urban residents; see discussion in Chapter 5. 23 First, there has been a large increase in China's labor force over the past two decades, most of which has occurred in rural areas. Second, given the absence of large-scale uneployment in either urban or rural areas, there can be no doubt that there has been a major increase in employment since 1957, and that this, too, has included a large rural component. In particular, the results of Table 2.4 show that it is highly probable that China's agricultural sector has absorbed a very large number of new workers during the past eva decades. To confirm this expectation, we turn first to the topic of non-agricultural employment. E. Non-agricultural employment Estimates of non-agricultural employment in 1957 and 1975 are shown in Table 2.5. In compiling these data, I have attempted to exclude part-time employees and also to exclude employment in farmland capital construction (levelling, reclamation, terracing etc.) and water conservancy projects. There are three detailed studies of non-agricultural employment for 1957. The authors estimate civilian non-agricultural employment for 1957 as follows: Emerson (1965, p. 128) 39.7 million Liu and Yeh (1965, p. 208) 60.6 million H0u (1968, p. 362) 47.7 million The first col= of Table 2.5 is almost entirely based on Emerson's findings. We have omitted his fig'ure of 0.3 million employees in water conservancy; the remaining diffrance is due to rounding arror. Most of the dif.erence -ec-ween :he three estioates of ncn-agricul:ural employment arises :rom the following factors: 24 Table 2 .5 Non-agricultural Imployment in China, 1957 and 1975 (Millions) 1957 1975 1. State industry 8.0a 24,8 2. Collective industry 0 b 14.5 3. Handicrafts (66)b 4. Construction (excludes farmland 1.9 6.3 improvement & water control projects) 5. Transport, post, communications (4.4) 8.9 6. Trade, food & drink, finance (8.4) 24.0, 7. Services (hotels, barbers etc.) 0.5 1.4c 8. Health care & public health 1.9 6.5 9. Education & culture 2.7 6.3 10. Government administration & mass 2.9 83c organizations 11. Salt extraction 0.5 1.4c 12. Fisbin 1.5 1.2 13. Civilian nonagricultural employment 39.3 104,1 14-. Armed forces 3.0d 3 15. Total nonagricult=eal employment 42.3 107.6 Source: for 1957, zmerson (1965, p. 128) except as noted; for 1975, see text. Note: data in parentheses are based on weak source material and are therefore open to question. See text. a- acludes urban public utilities and, in 1957, enterprises jointly managed by state and private personnel. bdata for 1957 include carrier services. chased on assumed annual increase of 6% during 1957-75. dLiu and Yeh (1965, p. 209). 2.5 1. Liu and Yeh include 5.6 million members of work brigades. These workers are excluded in Table 2.5 because most of them are farm workers who are recruited into work brigades for short periods of time. Employees of work brigades a±e also excluded from the non-agricultural labor force by both Emerson and Hou. 2. Hou's estimate for handicraft employment exceeds Emerson's-by 1.4 million because Hou tries to estimate the number of craftsmen who joined Advanced Producer Cooperatives in 1956; this estimate includes double counting because some of the handic=aftsmen joined industrial enterprises and are thus counted in the industrial work force. The Liu-Yeh figure includes the craftsmen who joined coopera- tives and also adds 4.5 million workers as an estimate of the full-time equivalent of part-time handicraft workers. 3. Traditional transport employment is difficult to estimate because of a lack of detailed information either before or after 1949. Emerson's estimate of 2.5 million workers is less than either Eou's figure of 4.8 million or the Liu-Yeh figure (again including a full-time equivalent for part-time workers) of 10.0 million. 4. Trade, food and drink is another controversial -sector because of the presence of rural peddlers. Emerson's estimate includes 6.7 million workers in trade and 1.1 million in food and drink. Liu and Yeh estimate 1957 employment in these areas at 5.0 and 6.4 million respectively. Hou's figures are difficult to ascertain because he lists 1957 employment in trade, food and drink at 5.374 million (1968, p. 356) but also gives this figure as an estimate for the traditional segment of these sectors alone (1968, p. 366) with another 5.245 million allocated to the modern segment of these sectors. 5. Domestic servants are assumed by Liu and Yah to have remained at the 1933 level of 2.3 million; Ecu uses a figure of 0.7 million. I follow Emerson in omitting this category because there are no data whatsoever. The weakest asoects of these 1957 estimates come in the handicraft, trade and transzorz sectors which include large co-lements of unorganized rural workers whose numbers are very difficult to estimate. In each case, Emerson's data, which are used here, fall below those of Eou and Liu and Yeh. Accordingly, there is a distinct possibilit-7 that the -2.3 million total shown in Table 2.5 undaresci=aces full-ie non-agri oul :ral emloy-ment, which could in `ac: :ave reached the 30 million evel i lied by ou s ZeSl (C7. milli n ci'7 Zs pLus 3 million mili:ar). Ecweve: 50 million represents =n 11per -- 26 difference between this and the higher Liu-Yeh figures arises from their inclusion of part-time workers in the calculations. Turning to the 1975 employment figures shown in Table 2.5, the sources for these estimates are as follows: A November 1976 article by GUnter Kohrt, former East German ambassador to the People's Reapublic, refers to "the workers in industry, construction and transportation - about 53. million in a total population of 800 million. . This statement is used to derive an estimate of industrial employment for 1975. An index of freight transport via rail, water and highway (Table 2.6) shows average annual growth of 5.47. during 1957-73. Assuming that other transport modes grew at a similar pace and making allowance for rising productivity (due to improved highways, more powerful locomotives, substitution of motor for sailing vessels etc.), I assume that transport employment expanded at an annual rate of 4% after 1957. This assumtion results in the 1975 employment com=onent of 8.9 million workers shown in Table 2.5. Turning to construction, Perkins (1975a, p. 134) has estimated that gross capital formation proportions rose from 21% to 287. between 1957 and 1970. Perkins (1976, p. 16) finds that with 1957=100, China's 1974 gross domestic product (in terms of 1957 prices) amounted to L54.3. If capital formation proportions remained constant after 1970, a 1974 index of gross domestic investment may be calculated as 339.1. If aggregate product (and, by assumption, gross domestic investment) rose by 5.6% during 197zt/75 (U. S. Central Intelligence Agency 1975a, p. 1), -he 1975 index of investment oulay (1357=100) beccmes 358,1. :he 1375 e=loymenz Zigure :or :cons:=:ion is derivec by ass'ing eaua] ercentage growth i:hs ncx of gross i:ves=enC Table 2 .6 Doestic Transport Growth, 1949-1973 Index of Freight Volume 1957 reight a Turnover 1949 1957 1973 (mill. ton-k) Railways 100 491a 1ob 134,590 Shipping 100 990a 1100b 341,390 Highway 100 14+46a 45000 3,940 Index of aggregate1 freight volume a N.R. Chen (1967, p. 373-76). bCheng Shih (1974, p. 35). The figure for highway freight compares 1973 with the peak pre-1949 ye,ar. cWeighted average of indices for three transport modes using 1957 freight turnover as weights. outlay. Given an iiployment total of 55 million persons for industry, transport and construccion, industrial employment may be calculated as a residual total of 55 - (8.9 + 6.8) = 39.3 million workers. According to the formerly prominent Chang Ch'un-ch'iao (now disgraced as a member of the "Gang of Four") (1975, p. 6): Industry under ownership by the whole people accounted for 97 percent of the fixed assets of industry as a whole, 63 percent of the industrial population, and 86 percent of the value of total industrial output. Industry under collective ownership accounted for 3 percent of the fixed assets, 36.2 percent of the industrial population, and 14 percent of the total output value. Besides these, individual handicraftsmen made up 0.8 percent of the industrial population. Applying these figures, which refer to 1973, to our derived industrial employment total yields the following results: state-owned industry: 39.3 x 0.63 = 24.8 million employees collective industry: 39..3 x 0.362 14.2 million individual craftsmen: 39.3 x 0.008 = 0.3 million State-owned industry refers to plants which derive their fixed assets 1rom, and turn over most of their profits to the state. This category includes enterprises administered by offices of the central, provincial, municipal or county governments. Collective industry refers to enterprises which derive their assets from the savings of a distinct ccmmunity, normally an agricultural commune or one of its constituent brigades. Collective enter- prises retain zheir profits.12 The singificance of the e=loymenc figure for industry is zot zear because many employees of ruzal colleczive imduszr :re "==ah workers S nd ~eaZS a n t 3 7 U MS,- i- n), a nd *-en=ce a e ub e r 0 f 1 -- "-7 SIM.OVeeS 29 of commune and brigade industries may be much smaller than the number of commune members who participate in these enterprises during the course of the year. Since Chang Ch'un-ch'iao's article gives no explanation of these data, it is possible that the employment total for collective industry considerably overestimates full-time employment in that sector.13 Since the procedure used to estimate 1975 employment figures in lines 1-5 of Table 2.5 include numerous unverifiable assumptions, further substantia- tion of the order of magnitude of the results is desirable. This is available from emloyment and output totals for Shanghai and for Liaoning province. Data in Table 2.7 show that industrial labor productivity in these two regions averaged 23,235 yuan per man-year for 1975 (in terms of 1957 prices). If this figure is applied to the 1975 gross value of industrial output (GVIO) of 378.480 billion 1957 yuan (Field, Lardy and Emerson 1976, p. 17), 1975 emloyment in industry and handicrafts would appear to be 16.3 million, far 1 14 less than the total of 39.3 million derived above. But Shanghai and Liaoning are China's most advanced industrial regions. Dividing national GVIO by average labor productivity in these tWO regions is certain to understate total employment because of the implicit assumption that labor productivity in these two regions approximates the national average. In fact, the advanced state of factory industry and the small share of low-productivity handicraft activity in the industrial output of these regions means that the producitivity figures shown in Table 2.7 must exceed the national average by a large margin. he extenc of this deviation is calculated for the year 1955 in Table 2.3, which shows tha: vith industr defined to include handizrai:s, as has -een :1e :ase since 1953, i:dus:illabor produccivi:v in Shanghai and -iacwing was 30 Table .?7 1975 Iadustrial Cut-ut and Employment: Shanghai and Liaoning G7IOa Industrial GVIO per Billion Employment Vorker 1957 yuan (Millions) (1957 yuan) Shanghai 55.707 2.3 b 24,220 Liaoning 44.202 2.0 0 22,101 Total 99.909 4.3 23,235 a T'ield, Lardy and Emerson (1976, p. 11). Emnloyment in Shanghai city totals 3 million (BBC W825 (1975), Al-2). Reference to two million industrial workers therefore appear to include the entire municipality, not just the city proper. Peki=z Review 27 (1975): 17 states that "In shanghai. . . the number of female industrial workers has increased from 180,000 in 1949. . . to over 800,000, or 35 per cent of that metropoliz' total work force today." Assuming that "work force" refers to industry alone, Shanghai industrial employment becomes 800,000/.35 or about 2.3 =illion. BBC W825 (1975), Al. Table 2 .3 industrial Labor Productivity for 1955: Shanghai, Liaoning, National Output (Bill. 1952 yuan) Employment (locos) Productivi GV7O G770 GVIO LT L- GVIO/L, Shanhai 8.763a .2b 9.047 430 599 15,04 Liacning 7.532e .3970 7.929 754 242 996 7,961 Total: Shanghai 16.976 1595 10,643 Lia oning' National 44748 10.123f 54.870 f 4152 820 12354 4,441 Aigures Notes: GVIO = sum of gress value of act:ory out-put (GTO) and gross value of handicraft output (GVEO). Employment totals are the sum of components for factories and handicrafts designated by F and H respelively a?ield, Lardy and Emerson (1975, pp. 20-1). bCalculated from data iz ibid. by assuming that the ratio of handicraft to factory output was the same in 1955 as in 1956.- 0Calculated from ibid. by assuming that the ratio of handicraft to factory output was the same in 1955 as in 1957. Calculated from GVH0 ahd from averagt productivity per gainfully occupied individual handicraftsman for 1954: 1677 yran (Shanghai) and 1642 yuan (Liacning). Productivity data from Schran (1964, p. 172). eAithmetic average of 1954 and 1956 figures shown in Rawski (1971, p. 5). C..hen (1967, PP. 210, 483), SMmerson (1965, P. 128), 32 2.40 times the national average. If this differential has persisted over the subsequent two decades, the 1975 national employment total for industry (including handicrafts) would be 378.680 x 2.40 x 109 or 39.1 million 23.235 x 103 workers, a figure which is within 1% of the comarable total rred in Lines 1-3 of Table 2.5 for 1975. Although it is not possible to check the validity of assuming that inter- regional productivity differentials have persisted through a period which has seen major shifts inthe level, structure and regional distribution of industrial activity, the close agreement between eployment figures derived from entirely different sources makes it possible to place considerable confidence in the results shown in Lines 1-5 of Table 2.5. Estimates of 1975 e=loyment in the remaining sectors can be explained more briefly. Employment in the sectors listed on Lines 6, 7, 10 and 11 of Table 2.5 is assumed to have increased at 6% annually between 1957 and 1975, a figure which is slightly higher than the 5.6% growth rate for Gross domestic product estimated by Perkins (1976. p. 16) for 1957-74. This assumption is justified by the rapid exansion of the service indus cries which dominate these categories. Trade and finance, the largest of these sectors (in terms of empLoyment), appears to have outgrown total output since 1957. 1 Chinese source reports that "China's total retail sales of co=modities in 1973 rose more than seven-fold compared with the early post-Liberation days" (Chi Ti 1975, :. 17). This statement probably compares 1973 with 1950 or 1951 (:here aDnear :to e no daza on zetai4 sales f_r 1919) If 1973 recail sales aze 3 :i=es the 1950 _eval, :en wi:h '957=100, 1973 re:ail ol e becomes 2:r9-39 dependizg on whi0 :wo tade- _:IZ.. arS' Sed. :5.&.s ~s~~S te -aa 33 . 15 trade volume becomes 341-395 (1957=100). Thus retail sales have increased at a minimum of 5.6% annually during 1957-73, exactly the growth rate estimated for GDP; the growth of retail sales could have been as high as 9.0% annually. Since much of the growth in sales has occurred in rural areas served by small stores, large increases in sales per eployee appear izprobable, and hence a substantial growth rate should be applied to 1957 eployment in trade. Scattered data on savings deposits show .a similarly rapid increase in turnover at bank branches: Region Period Increase in deposits Chek_ianga 1966-75 urban 76.8% above 1956-65 increase rural 103.3% above 1956-65 increase Eeilungkianga 1963-75 +230% 1974-75 +15% Kiangsia 1974-75 +11% a Kirin 1965-75 urban +160% rural +390% Fukien 1965-75 +89% Note: these figures may refer either to stocks or to flows; the statistical concept is not clear from the translations. a BBC W867 (1976), A.3. b BBC W873 (1976), Al. This figure refers to reserves and savings of cities and villages. Again, shas sar) increase in :he volue of transac:ins, pa lly ural areas, suggests subscancial emp.oyment growzh. i-annual a=ploy-en: -:wh in en i zass a iz s (Line )=ay b-' e zcn roversialz, -zut in u iew of :Zf e raiz 34 growth of governent revenue and the proliteration of economic planning activities at the provincial, county and commune levels, it is difficult to doubt that e=loyment in this area is now substantially above the level of 1957. Total state revenue and ex,enditure have grown as follows (in billion yuan): 1950 1957 1973 Revenue 6.5 31.0 91.0 (approx.) Expenditura 6.8 29.0 81.6 (approx.) Sources: 1950 and 1957 data from N. R. Chen (1967, pp. 441, 446); 1973 data (as multiples of 1949) from Cheng-chih ching-chi hsdeh (1975, p. 406). Thus state revenue -and expenditure have risen at 6.7 - 7.0% annually during 1957-73, substantially above the growth of aggregate output. The spread of goverment activities is not as easy to document as the growth of fiscal aggregates. It is certainly a mistake to take literally Cultural Revolution statements about reductions in numbers of central government officials, which are used by Swamy (1973, p. 58) to conclude that "the total effect of the Cultural Revolution was a sharp decline in the net value-added of the trade and services sector." 'Merely listing some of the areas into which government administration and mass organizations have penetrated during the past two decades is perhaps enough to justify an assuption o= substantial employment growth: rural communes, rural and urban small-scale industry, delegation of increased planning authority to provincial and county economic officials, formation of new administrative bodies (revolutionary committees, three-in-one groups) wizhin industrial enzerorises, eiansion of the "down :z -he countrside" ovemen: for urban Youth and urban bureaucazs, increasei :oreign concaczs. The 6'. 3-ro-w-ch ass= c ion 4-s app~ 11 i _o e r S.na I s e1- ae 1.=a 7) 7:-a 35 assumtion that the income elasticity of aggregate demand for these items is approximately 1.0 and that productivity has not changed significantly since 1957. The salt sector (Line 11) is arbitrarily included in the list of sectors for which 6% employment growth is assumed; I have found no information on the expansion of this sector after 1957. 1975 employment in health care (Line 8) is estimated on the basis of the following reports: The rural medical network has six million medical personnel, including 1.5 million barefoot doctors \i.e. parademics] and 3 million spare time public health workers who work in the fields an average of 100 days/year. In addition, 1.1 million urban medical personnel visit rural areas in mobile teams (BBC W885 (1976), A3-A4). There are thus six million rural medical workers, of whom 3 million work only two-thirds time in the medical field (assuming a 300 day work-year). The full-time equivalent of the rural medical cadre is thus 5 million at most. With 1.1 million urban medical workers who do visit rural areas, we may estimate overall eployment.in health care and public health at 6.5 million persons. This may be a generous estimate since some of the 1.5 million rural health workers who are neither part-time public health personnel nor paramedics may not devote their full time to health work. 1975 employmeut in education and culture (Line 9) is derived as follows. ?eking Review 25 (1976):11 reported that "The nationTs total number of primary school pupils has risen to 150 million. . ." In 1957, the number of primary school pupils was 64.3 million (TGY, p. 133). If we assume constant class sizes and also that the ratio of elementary teachers to all teachers renained ac :he 1957 lavel of 0.39, we =ay est4raze :.he '973 :or-s oftzac-hezs as C13,.0 'C 2- 0 x LC, :z7 Z :M. -Z'~ 71e. x 36 assume that emoloyment in education and culture rose in proportion to the number of teachers during 1957-75 (85% of all employees in this category for 1957 were teachers) then 1975 employment in education and culture becomes 6.3 million.16 Employment in fishing (Line 12) is taken from a lecture by Robert Hart, Chief Adviser to the Lnternational Fisheries and Marine Directorate, Canadian Department of the Environment; in addition to these full-time fishermen, there ate also 4.25 million part-time fishermen. The implied decline in ePloyment is supporzed by evidence of growing mechanization of this industry. Data for Chekiang province comparing 1966-70 with 1971-75 show that the total catch by sea fishermen rose 40% and that (apparentIy comparing 1975 with 1963), tonnage and horsepower of provincially-owned vessels rose by L50 and 189.3%, while tonnage and horsepower of comune-owned motor vessels rose by 40.1 and 45% respectively (BBC W870 (1976), A7). China's regular armed forces now consist of 3.5 million men (Line 14) (Xiddleton 1976, p. 1). F. Agricultural employment The preceding estimates of total and aon-agricultural employment for bench-mark years of 1957 and 1975 enable us to derive changes in agricultural emmloyment as residuals in Table 2.9. 37 Table 2.9 Agricul'ural Labor Force, 1957 and 1975 (millions) Version A Version B Version A Version 3 Source 1957 1975 1957 1975 1. Total Labor Force 277.1. 382.5 279.3 418.9 . Table 2.4 2. Less A. Urban Unemployment 5.5 1.0 5.5 1.0 Table 2.4 3. Non-agricultu.ral 42.3 107,6 42.3 107.6 Table 2.5 Employment 3. Agricultural Labor Force 229.3 273.9 231.5 310.3 4. Increment in Agri- 44.6 78.8 cultural Labor Force 38 This residual consists of the following components: 1. Increase in farming employment. Schran (1969, o. 65) estimates the 1957 labor force engaged in farm and subsidiary work at 193.2 and 44.0 million persons respectively. 2. Increased employment in reclamation, levelling, terracing, etc. ("farmland capital construction" in Chinese publications). 3. Increased employment in irrigation and water control projects. Schran (1969, p. 64) estimates that 16.6 million peasants were employed in work brigades (corvee labor) or on construction projects in 97. 4. Net increase in unemployment. On the basis of the discussion in Chapter One, this category is assumed to be aegligible. Furthermore, the actual number of positions created in the above three sectors: agriculture and su'osidi'ary activities; farmland construction and water control, certainly exceeds the residual figures shown above, and for two reasons: Substantial mechanization of rural work, including food processing, transportation and irrigation, has eliminated large numbers of jobs. If we assume that there has been little or no net increase in uneployment, it follows that workers displaced by mechanization must have been reabsorbed in one of the three categores of rural employment listed above. Furthermore, the residual increase in employment estimated above is, if anything, too small. This is because of the possibility of downward bias in our estimate of 1957 non-agricultural employment in the handicraft, transport and trade sectors discussed above. Finally, there has been an apparent increase in the average number of labor days per rural worker. Bearing in mind the likelihood that Version B of our labor force calculations is more realistic, we conclude that agriculture, far=land conscruction and water control appear to have absorbed a minimum of 79 -illize workers be7ween 1357 and L9,a igue ,zv:erasa=:s -'C-.mae. z)--- Scnzanls e:z: Df.: 5 :oeasan -3n'7Men: 1in a-M war<, -usda-r or andz- ~ 39 (1969, p. 65). This finding and its implications will be further investigated in Chapters Four and Five. In the meantime, we turn our attention to industry, the sector responsible for the largest single increment in non-agricultural employment since 1957. Chapter Three Determinants of Industrial Employment Vigorous expansion of the size and technical level of industry has been the outstanding feature of China's post-1949 economic growth. Industrial production has risen at an average annual rate of for nearly three decades, and has increased its share of aggregate product from approxi- mately 17% to 42% between 1952 and 1971 (Rawski 1977a; Liu and Yeh 1965, p. 66; Perkins 1975a, p. 161 ; product shares calculated for a broadly defined sector including mining, manufacturing, utilities and handicrafts). This chapter investigates the impact of industrial growth on the size of China's industrial labor force. We begin with a brief quantitative overview of industrial employment. The remainder of the chapter discusses the political, technological and institutional determinants of industrial employment. A. Patterns of industrial employment, 1957-1975 In view of its major contribution to China's economic growth, it is not surprising to find that industry accounts for a substantial share of incremental non-agricultural employment during 1957-75. The state-owned industrial sector (Line 1 in Table 2.5), absorbed 26% of new non-agricultural employees during 1957-75; if collective and handicraft employment is included in the total (Lines 1-3 of Table 2.5), this share rises to 38%. However, if employment creation in industry is related to total estimated increment in labor force (Version B - using high population figures) of 139.6 million persons (Chapter Two, section F), industrial job creation appears less substantial. New industrial employment accounts for only 12-1-1 of incremental employment (assuming no net increase in,\unemployment during 1957-75) using a narrow or broad definition of industry. When these figures are compared with industry's share in incremental product, which amounts to approximately 597 for 1957-71 (Perkins 1975a, p. 161) it becomes evident that in relative terms, the emloyment creating impact of industrial expansion has been quite modest. The same conclusion emerges from a different viewpoint in Table 3.1, which sumarizes available national and regional data for industrial output, employment and labor productivity. These data give a picture of strongly rising labor productivity which suggests a process of industrial capital deepening. This can be confirmed using rough data relating to the producer sector of industry, which accounts for approximately 857. of industrial growth during 1952-73 (Rawski 1977b, Tables 5.1, 5.4). These data, shown in Table 3.2, show that after the First Five-Year Plan period (1953-57) when rising utilization rates and expanding domestic markets permitted labor productivity to rise while capital-output and capital per worker declined, the past t-wo decades have been years of capital deepening, as is shown by substantial growth of capital per worker and of capital-out-ut ratios which have accompanied the continued rise in labor productivity. It should be acted that the investment estimates underlying the capital stock series may well be too low, in which case the imact of capital deepening would be even greater than shown in Table 3.2 The impression of capital deepening is confirmed by visitor accounts indicating that although the degree of labor intensity in Chinese industry is higher than would be found in advanced industrial nations, the direction of change zo.sis:entl favors reduccion of -abor coses. Afe invescigating ap prximacay ifa y planes duri,g the s,,er - f 1975, che Rura. Small - scaIe 42 Table 3.1 National and Regional Labor Productivity in industry, 1952-75 GVIO Labor Force Gross Output Per iorker bill. =1.1liona yuan yuan Na tio nal 1952 34.326a 12.7d 2,703 1957 78.390a 14.6 · 5,369 1975 378. 480b 39.3 e 9,630 Peking 1955 1.291 0.129f 10,008 1975 19.607 1.0 19,607 Tientsin 1955 2.853c 0.157 18,172 1975 18.748b 1.0 g 1-8,748 Shanghai 1955 9.047 c 0.599 15,104 1975 55.707 2.3 24,220 Liaoning 1955 7.9290 0.996h 7,961 1975 44,202b 2.0 22,101 G710 = gros 7alue of industrial output in 1952 yuan (1952-57) and in 1957 yuan (1975). Znconsistency of price base _eans that the productivity flgures for 1975 understate actual growth. Labor force data include handicrafts and collective izdustr as well as state-owned factories, =ines and utilities. arshikawa (1965, p. 60). bil Lardy and Emerson (1976, pp. 11, 17, 20). i Lardy and Zmerson (1975, pr. 20-1). dEmerson (1965, p. 128). ab'e 2.5 above. N.R. zCh1e: (167, p. 43). *:a:527 an- . above. ,er:'ved f=zrvss value -.f cuz-7tut -77- b- ts-iz:h - 57.. z: :7C~stesae~r.5- 긷 44 Industry Delegation report noted that: In the plants we visited the emphasis was on efficiency and sav4-n, rather than absorbing labor. Plant managers were eager to point out the number of labor saving devices they had intro uced during the year and the number they hoped to introduce next year. (ISSI, Chapter 9). What factors are responsible for the evident policy thrust toward capital deepening and increased productivity, and for the resulting limits on industrial job creation? These issues are further examihed in the following discussion of determinants of industrial P loyment. B. Economic objectives and industrial structure China's economic ambitions were well summarized in a 1975 address by the late Premier Chou En-lai, who called on his fellow citizens to build plans "to accomplish the comprehenF '.ve modernization of agriculture, indust-.7, national defease and sci-ence and technology before the end of the century, so that our national economy will be advancing in the front ranks of the world" (Peking Review 14(1975):23). In a large economy which must inevitably supply most of its own inter--ediate and capital goods, it is the industrial sector, and especially engineering, chemicals, metallurgy, resource and other branches of the producer sector whose output is essential to tHe trans format-4 on of societ, I --; b - y's production poss ii- t4 as. As one Chinese writer observed, it is these branches of industz-7 which u. ! Itmodern tecl-mology to equip agriculture, imdustry, the milita--7 and science for achievim- the modernizat4on a-- all these sectors" (W - Hu-sheng 1963, p. 181 4o the aat--,ral oropens4'7 of a cont4zental nation t 0 r a -7 D 4 1 V Z n cmestiz scuzces :D-,: SIU-001-7, we Must: add --I-e e=er-;enca of C-14na's orasanz leaders im :ia-7S a:ld MorZ rSCeMt:":7, .-e :7eaZS :,-e abrupt withdrawal'of Soviet technicians Ln 1960. Although the Chinese do not question the existence of economic gains from domestic and international specializacion and division of labor, t-e history of these two periods shows that isolation and autarchy can provide incentives to successfully overcome problems waich would never be confronted if outside supplies be had. This view, which draws support from the wartime experience of the advanced industrial nations, leads Chinese planners to limit dependence on external supplies from domestic as well as foreign sources to situations in which local products cannot possibly meet the quality, cost or time requirements of current demand. With its emphasis on the costs of excessive specialization and the potential gains from isolation, China's desire for "self-reliance" leads to an investment strategy which seeks to develop a broad range of industries at the regional as well as the national level. The inmact of this approach on the capital intensity of industrial output and the ensuing limits to industrial eploy-ment growth can be seen from Table 3.3, which ranks sectors of industry at tne two-digit level according to fixed assets per worker in 1952 and output growtn during the following two decades. With the exception of paper (a capital intensive industry with a low growth rate) and machinery (a relatively labor-intensive sector with a very rapid growth rate), all industries with above-average capital intensity showed above-average growth rates, while those with relatively low capital intensity experienced relatively slow growth. In addition to cuantitative expansion, industry's qualitative achievements mav be briefl described as follows: Dependence on i=orted i-vesene goods has -ecli`ed sharpl. OnZc:rasZ to :he 195s, when major izvescz=ent oro4ec:s :hrcuchcut "nCus:= reaed on 46 -ciable ,3 Capital ntensity and Output Growth by Sec-tor, 1952-1972 Sectors ranked in order of decreasing Sectors ranked in order of capital-labor ratio, 1952-53 oucpt growth, 1952-75 Productive Ficed 1972 Gross Assets per outnut • Production Worker 1952=100 (yuan) 1. Electric power 51,197 1. Petroleu= 76.4 2. Petroleum 24,945a 2. Machiner7 61.8 3. Paper 9,528 3. Chemicais 35.4 4. Ferrous =etallurgy 9,251 4. Ferrous =eta2lurgy 16.0 5. Chenicals 8,120 5, Electric power 15.2 ALL INDUSTRY 5,656 ALI INDUSTRY 11.6 6. Coal 5,029 6. Building materials 10.,4 7. Textiles 4,306 7. Paper 6.3 8. Machinery 4,750b 8. Coal 3.8 9. Food processing 3,373 9. Food processing 2.9 10. Building Materials 2,431 10. Textiles 2.8 11. T4mber 1,210 11. Tiber 1.3 Sources: f or column 1, Ishikawa (1965, pp. 125-26); for colunn 2, which is caIculated using g-oss output 7alues in 1952 prices, Rawski (1977a, T'able III-33; 1977b, Tables 5.1 and 5.3) and Ishikawa (1965, p. 60). a rude il extraction. Data refer to =etal processing, an aggregate which includes =anufacture of =achinery and meta! products and also repai- work. 47 complete sets of imported equipment, over 95% of machinery requirements now come from domestic suppliers even though the volume and sophistication of investment have increased over time (Rawski 1977b, Table 4.2). Industrial imports continue to be used in order to provide large-scale plants -which China cannot equip (large-scale fertilizer plants), to break short-run supply bottlenecks (steel products) and to provide models for domestic manufacturers to study, imitate and improve (machinery), but the importance of these imports is now restricted to particular sectors and time periods and they no longer constitute the major thrust of industrial investment, as was the case during the 1950s. Massive investments in formerly bacxward interior regions financed by a program of revenue sharing have led to "a general trend toward equalization of per capita provincial output" (Lardy 1976, p. 17; see also Lardy 1975a). Despite short run costs in terms of infrastructure investments and initially high capital-output ratios, the appeal of this strategy is obvious in a nation in which the median provincial population exceeds 25 million persons. As a result of the revenue-sharing program, formerly non-industrial areas now produce a wide variety of intermediate and capital goods, as well as consumer products, and are increasingly able to meet the needs of changing local demand patterns. The extent of regional development can be seen zrom reports of visitors to China. During the course of a nine day visit to 16 industrial plants in Honan province, formerly one of China's less industrial areas, the Rural Small- scale Ladustries delegation observed provincially manufactured trac=ors, power tillers, _eneraCing equipment, pu s Motor vehici parts, -:er-iizer eCizmenC ?ar=s, diasal engines, electric moCrs, mecers, extie nachinery, zaK n ~1s, buses, Zrintrg equipment, comressors, farn machinery, and zranes as -we' as machine tools from over 30 Honan enterprises (RSSI Notes). Development of rural industries, which began during the Great Leap Forward (1958-60), declined during the subsequent years of agraria. crisis, and expanded with renewed vigor since 1963, has extended industrial activity into most of China's 2000-odd counties. Virtually all counties have workshops making and repairing farm machinery (Peking Review 48(1972):17 states that 96- of counties have such facilities) and many are engaged in one or more of the "five small industries" - machinery, iron and steel, fertilizer, cement and energy (coal and hydropower). Communes and brigades have also developed industrial activities ranging from feed mills and carpentry shops to foundries and machinery workshops in prosperous suburban units. Urban and rural enterprises are linked by well-developed lines of comunication which include consultation and training arrangements among units of diffe-ring technical levels, national and local meetings focused on particular problems or on "exchanging advanced experiences," and an enormous publishing industry which distributes technological information and hortatory injunctions 1 to every village (Rawski 1975; RSSI, Chapter 10). Development economists, often impressed by India's postwar economic experience, tend to e=nasize the defects and risks of the sort of industrial strategy implemented in China, with its emphasis on imort substitution, development of a broad range of producer industries, and allocation of invest=ent funds and foreign exchange by administrative fiat rather than market processes (Bhagwati and Desai 1970; Balassa 1970; Mellor 1976). China's experience, however, shows that a program of *ndustrial development based on iport subscituzion and adinistac4ve resource a_!ocaricn _eed 7i: z:a: a 'etarg.Z, overcapi:alized and under:ilized induscrial s-s:am. zzis- 49 trative pressures for improved performance, an ideology emphasizing productivity, inventiveness and service, and the stimulus of the severe economic and military threats of the 1960s have combined to create an industrial svstem which displays the opposite traits: technological progressiveness, responsiveness to shifting user requirements, pursuit of opportunities to raise output. Under these circumstances, it is not surprising that Chinese investment decisions have given little weight to the employment content of industrial growth. Chinese investment decisions are essentially responses to anticipated imbalances between demand and ecLsting productive capacity. Investment outlays in the labor-intensive consumer sector come in response to increased domestic purchasing power or rising import requirements. But given the economic objectives and strategy outlined above, Chinese planners are not afxious to encourage either of these demand components. If investment in consumer industries is to cater to domestic demand, higher spending on consumer products means either higher wages or lower personal savings, either of which tends to reduce the level of investment. Investment in consumer industries aiming to exploit foreign markecs i-lies an increase in imports and a consequent reduction in self-reliance. Any increase in consumer output threatens to undercut the "moral econo=y" of low consu=ption which the Chinese have developed at considerable cost. If investment is diverted to labor-using industries, it will be not because of their employment potential, but as a response to external factors such as persistant poular demands for higher living standards or a desire to 4-crease i=ports of foreign cechnology. 7-= -,- :,neral:Hr-jSi- OX ;7,4:,a 's nod,_,s =_` a -o~ 11 a : z-as zzze z~-r-,w 50 opposite direction. This is the Chinese effort to fully mobilize available resources for current use. Policies designed to raise the utilization rate of resources include: transfer of second-hand machinery to small enterrises; a policy of pricing industrial products high enough so that even baclaard producers can aspire to break even (Chang I-fei 1965,pp. 25-6); development of.rural industry on the basis of resource deposits too small to permit profitable operation of mechanized techniques*; and organization of urban housewives to staff enterprises designed to make use of waste and scrap from larger factories. Each of these policies has other objectives and impacts, but each has operated to encourage the growth of industrial employment and to modify the bias of Chinese industrial planners toward industrial operations with high capital-labor ratios. C. Technology and employment in three types of industrial units Given the overall pattern of industrial investment, growth, and output mix, what determines the level of employment at the enterprise level? The following pages describe Chinese industrial cechnology by considering the nature and contribution of three types of industrial units which have figured prominently in China's industrial achievements during successive periods: the large Soviet-aid projects wnich dominated the investment program under the First Five-Year Plan (1953-57); smaller units, most inherited from the Republican era (1911-49), which attained technical leadership in some industrial sectors durIng the 1960s by substituting experience and entrepreneurship for capital equipment; and the revived and expanded rural indusries which, since the d z- 136 0s, h av.e 'egue t o f or e increas`=.7glycse isbten n':- z a-4- 51. Cl. Soviet-assisted projects of the First Five-Year Plan2 China's First Five-Year Plan (abbreviated as FIYI; the plan covered the years 1953-57) sought to implement a "balanced growth" strategy by developing a group of large, modern producer goods enterprises which would cater primarily to demand generated within the emerging heavy industry complex. The core of the plan consisted of about 150 Soviet-aided investment projects, far which the 3 Soviets provided designs, equipment, engineers and repayable loans. These plants were large, integrated and capital intensive. As can be seen from Table 3.4, each of 154 projects was expected to absorb an average of over 70 million yuan during 1953-57 alone (many were not completed until later). Together with 143 ancillary projects, these undertakings absorbed over half of all industrial investment undertaken during the 7=P years. Several projects were enormous, with investment budgets exceeding aggregate industrial investment for whole provinces (Table 3.5). Table 3.5 also illustrates the capital intensity of the new plants. Comparison of employment and construction cost data for individual new plants with sectoral and national data on fixed assets per production worker shows that capital ?er worker at the Soviet-aided planrwas several times the national average in both machinery and ferrous metallurgy. These plants have achieved a mixed record. On the positive side, gradual completion of the Soviet-aided projects during the mid- and late 1950s led to a major exansion of import substitution and output volume in a wide range of industries. In terms of quantity, much of the growth in industrial output volume during 1957-65 is atzributable to these plancs. On :he qualitative side, these new en-rorises nanu:aczured many i=nort subsci:uzes, o::az a- a 52 Table 3.4 ,National and Regional. Investment Data and PR-oject Size, 1953-1957 (million current yuan) Region 1957 S.area Investment Outlay, 1953-57 Industrial -n Indus trial overall Industry Average Grosa Outjut Project (%) Size National Total 100.0 55,000k 25,030k Sovint-aid projects 1.1,0004 70.512= Support projects 1,800m 12-587 Provincial data b b Shanghai 19.5 1,371 500+ 0.200 Liacning 17.2 7,770a Kwangtung 4.0 1, 438 b 550d 0.8351 Kir, in 3.3 2,150 a 1,7i6 Shant,ung 5.1 450+i 0. 96oi Cheiang 3.0 276. Eurei 2.5 2,210 802 - Eunan 2.1 1,217a 350+ Eonan 1.9 2,590a 654 - lardy (1975b, pp. 31, 40). Total 1957 industrial gross output (excludJig handicrafts) was 65.02 billion 1952 yuan. bXuanz-ming jth-ao, Sept. 24, 1957. Average project outlay is for 600-700 projects undertaken during 1956. c du-nei iih-Pao, Dec. 31, 1957 rerorted that 36.3% of the irovince's :FTP inves :ents had gone to industry. den-cui pao (Hong Kong), Oct. L, 1957. C1949-57 data g io., seid. 19, fai Hu-nan _ao, Sert. 30, 1957. Figure for 1953-56 only reported in JMJP March 31, 1957. Dertved by applying 79.8% share of industry in total investmet or 1953-56 rePorted in C'i-lin jih-cao, Aug. '9, 1957. ~a-h fih j-rao, sert. -0, 195 7;dt ref--- to 19c52-55. ____ (og pac J179 1z57, reir-tei- :',at 1717 =J-~n rua Wa2 :0 'te expende,_ c_= 2i2 ac :s t-Irir Table 3.5 Capital, Labor and Gross output ý, Major Industrial Branches and Enterprises, 1952-56 and 1965 (yuan) Sectoral Data Major Entermrise Data - 1965 K,/L GVI/L K L K /L p e 1952 1955 1956 (mill. yuan) adustry 5656a `835a 1172a etal Proceesing 4750a 6035a 22569a Loyang Tractor 400 20500' 19512 15244c Wuhan Heavy Machinery 130d 7000e 18571 32500'- T'aiyuan Eeavy Yactinery 2002 7200 27778 :ro-Steel 9251a 13302a 19625a ,Iuhan Steel 1800-2000 35000' 54285- 28571c Cheni.cals 8220a 1114a - Kirin Fertilizer Pl. 220-260g aN.R. Chen (1967, pp. 260, 485-86). Cluz0ka shirZo ze-t 95 (1956), Pp. 17, 21. ntry under '"u-an Steel is the cos,t of constructing an =specified 1.5 'llion ton/year steel facil4t. c ?ickman (1969, pP. 154, 827-33). dr (1959, p. 26). eT-ci aien-4ao (1967, P. 928). C'czou ka;ku zijutsu (1965, T: 64-3). SMa Yin-ch'u (1961, ;, 31). These data pertain to the 1950s. =ixed assets GVIO = gross value of Lndustrial output L = industri.al employment = cost of construction = Production- werkers large cost advantage over the foreign products which they replaced. References to the opposite tendency are rare. On the other hand, construction and manufacturing operations at these plants encountered difficulties which led Chinese economists to question the value of large, capital-intensive facilities several years before the abrupt withdrawal of Soviet technical assistance in 1960 forced China to abandon the investment policy of the preceding decade. On the demand side, F=Y investments were based on rudimentary planning at best. Wuhan's Heavy Machinery Plant was designed (in the mid-1950s) on the basis of expected 1967 demand (Hsiang Lin 1957, p. 18); a 1957 article pointed out that although FFYP investment in nitrogenous fertilizers was 4-5 times that in phosphate fertilizers, no research had been carried out to ascertain a desirable ratio between output of various types of fertilizers (P'an Kuang-chi 1957, p. 34). In some sectors, capacity quickly outpaced demand; in others, the output mix was inappropriate. In automobiles and tractors, for instance, although demand was "large in varieties but small in quantity, we planned for the future and built big integrated plants with many specialized machine tools" (Pai Ou 1957, p. 2). Such errors led to expensive ,odel changes at some plants and to conversion to entirely different product lines at others. Many of the new plants embodied standards of mechanization which, as Chinese wri:ars soon recognized, were not appropriate for China. The automated Casting shop at Shenyang's #1 Machine Tool Plant, for example, was actacked as a pleasant (for the workers) but costy and i=ratonal frill. A reol : t-e c rizs actuall7 stpported :eir nosiz.cn. c Cjzed as n adci::- failed :i iprove p=n cachnical perforance Lr -uali:- idicacots:: 5 5 olants. And despite reductions in unit labor and materials costs, higher depreciation charges and operating expenses at the mechanized plant gave the more "orimitive" facilities a substantial cost advantage even with interest charges on fixed capital omitted from the calculation! (Meng Chih-chien 1957). Numerous other reports document the tendency of F=Y major investment planners to include expensive items of equipment which added little to enterprise performance. As in any investment program, errors in planning were compounded by problems arising at the implementation stage. Delays, discovery of incorrect drawings and technical specifications, cost overruns (expansion of Shenyang's #1 Machine Tool Plant cost five times the planned amount; Pai Ou 1957, p. 5) and unexpected supply bottlenecks (managers at the new 7oyang Bearing Works found that designated suppliers had no plans to produce the required inputs; Wang Te-yuan 1957, p. 29), added to the difficulties which the new plants encountered. On balance, these plants have clearly made major contributions to China's industrialization drive. Their output forms the quantitative backbone of a vastly enlarged industrial sector. Problems of technology, product assortment and management have been gradually ameliorated, in many cases under conditions of great difficulty created by the Soviet pull-out of technicians and blueprints in 1960. One feature of these plants which has not changed, however, is their high degree of capital-incensity as measured by the complement of capital per worker. This can be seen from Table 3.6, which shows zhat e=ploy-ent 'as xpanded cquiae slow a: major 0lanZs including azzarses wniza id aaai nc: receive Sov-i_e: i ring the 950s. S>w irswh of e ent s Table 3.6 Employment Changes at Miajor Enterprises A. Plants Built With Soviet Assistance Wuhan Iron-Steel Works 1959 40,000 (excluding 70,000 =iners) Fu_rui (1959, p. 22) 1966 35,000 Richman (1969, 1. 75-) Loyang Tractor Plant 1959 20,000 Furui (1959, p. 19) 1973 23,000 Dr. Doris Dohrenwend, personal c=mmunication Shenyang 41 Machine Tool PI. 1960 6,000 ozaki (1960) 1964 4,80O FEE, June 13, 1964 1971 5,000 cc'KGTS 2 (1971): 10 Wuhan Eeavy Machinery Plant 1959 7,000 Furui (1959, p. 26) 1966 7,000 Richan (1969, p. 754) 1975 9,000 Terrill (1975, p. 289) 3. Other Plants Peking 21 Machine Tool Pl. 1959 6,0c0 Furui (1959, -. 12) 1966 4,000 Richman (1969, p. 754) Shanghai Machine Tool Pl. 1957 4,500 Shin ch:Eoku no kcikai (196c, i. 136) 1964 5,200 F=ER, June 30, 1964~ 1975 6,00 RssI notes Shanghai Stea= Turbi,e PI. 1959 6,700 Furui (1959, p. 24) 1973 8,000 Canadian Mission (1973) Shanghai 3oiler Plant 1957 3,300 Ihieh-fanrz ji-rao (Shanghai), Sept. 3: 1973 7,000 Canadian Mission (1973) T'aiyuan Heavy Machinery ?lant 1957 5,000 Shin ChUgoki no kikai (1960, p. 145) 1964 7,200 ok ag~itsu (1965, 1: 61-5') 57 particularly noteworthy when we consider that many of these units were still under construction or at the trial output stage during 1957-60, and that their output has subsequently risen very steeply. It is not clear why recognition of the excessive caPital-intensity of large plants has not led to reforms aimed at reducing the ratio of capital per worker. Perhaps the combination of fairly rigid manufacturing technolo- gies and limited Chinese capabilities in producing large-scale equipment have contrib uted to the continuation of high capital-labor ratios at these plants. Institutional obstacles to expanding employment at individual' plants, discussed below, may also be involved. Possibly the personnel capable of altering manning requirements of these plants are preoccupied with other tasks.6 Large plants in China today typically display a degree of capital intensity which does not reflect aggregate factor proportions; a considerable, and indeed growing degree of mechanization (e.g. materials handling by overhead cranes and power camping of molds in the foundries,; and high and rising (by Chinese standards) labor productivity. The degree of vertical integration, while no longer reaching the extremes of the 1950s and early 1960s -- when major Soviet-aided plants made their own hand tools and equipment labels -- is still high, even frr a semi-industrial country (Richman 1969, p. 567). Reports on the technological level of large enterprises indicate substantial improvements over the past two decades, but also show the presence ot large gaps between China and advanced industrial nations. In the field of :ower plan: equi:menc, fcr example, :-e Chinese are somewnaz beni:d Canada in size, *7olzze racinz z: equinmenc and eiincv of nanufacturing. . . Concrol sysCMs seen were '"o4zed as :z scope and nu=ber. ?:wer ine ~r2t~:22e :ay~nwa: : anear` scage :i-f e ne 58 In the power plants visited, the local control was relatively simple, hand wired, used primarily for data logging and alarm scanning for supervisory purposes, and often said to be on trial. There was no evidence of microwave transmission ustd for supervisory or system control . . . .The lack of research and development facilities and engineering and drafting offices in large factories producing capital equipment was most striking. (Canadian Mission, 1973) When one considers, however, that power-generating equipment was produced in quantity only at the end of the FFYU period, the achievements in this sector loom large: Distribution lines. . .were imressive. . . .From a strictly production point of view, the amunt of output is impressive. . .I= large boilers, the Chinese appear to have a strong capability . .. .The Chinese manufacture a range of switchear.h,.r. products, except disconnect switches, were produced in large volume. . . .In sirmary, the Chinese have developed a substantial heavy electrical equipment manufacturing capability. (Canadian Mission, 1973) Reports on the machinery industry give a similar picture of massive output growth coupled with a low, but rising level of technical sophistication. Galbraith (1972, p. 96) says of a delegation from the British Amalgamaced ngineering Union which visited the Shanghai Machine Tool Plant in 1972: "Their considered and professional judgement. . was that shop oractices were approximately those of 3ritain in the late nineteen-fifties" -- again, a major achievement for an enterprise which produced agricultural implements before 1949. Japanese reports on the machinery industry are often negative, stressing the inability of Chinese producers to match the standards of precision, exranded service and comtactness of Japanese irocucts (Thcn keizai simzun, A=ril 0a 11, 196Z; Sua 197., -o .:-1). Hcwever, :Lee:ortsz o 'hiza's desig ers and nanufacturers in 3roduzing smaU bazzhes :.f h g _'a-013 'ave -,on f7crm a&ee 59 note that the best Chinese products are "already in the top level" (Sato 1971, p. 175). Morr generally, China is advanced in theory and designing technique for machine tools. . . .when designing technique is established to a certain level, it is possible to gradually catch up in actual production as tooling skills improve and good quality materials. become available. Therefore it is worth noticing that China has attained a certain degree of advancement in designing technique (Sato 1971, p. 175). C2. Inherited enterprises A very different type of industrial unit has become prominent in China since 1960. These are older, smaller enterprises, often part of the legacy of prewar industrial advance in the private sector, which have typically received only modest infusions of investment funds, imported equipment and external technical aid. These firms deserve major credit for the flexibility, innovative success and responsiveness to demand which, in contrast-to the 1950s, seems typical of industry's performance over the past 15 years. Shanghai's Ta-lung Machinery Works provides a well-documented exaple of this type of firm. Ta-lung was established in 1902 as a ship repair works with 11 workers. In 1906,. with a staff of 50 men, the firm began to specializ4 in repairing achinery for Shanghai's growing textile industry. After 1911, the business gradually shifted coward manufacture, first of textile machine parts, and later of individual machines and, by the 1930s, of a full line of cotton spinning machinery which was installed in several profitable mills. Yollowing wartie efforts which included replacemenc o f dmaed ecuipmnent and muniius zanufacur Ta-lar.g resumed its patra f varied e-uirzn: zazufaccire. During .3d?-3, its roduc:s inced spizdes, lacms, nachine :.l egines and steel i0 Cs. In 193, Machine :co-s and nig Z uiienz 6o were the major products. In 1955, the firm was assigned to specialize in producing formerly imported items of petroleum equipment; in 1958, chemical fertilizer equipment was added to Ta-lung's product list. Since 1960, Ta-lung has produced equipment for both the petroleum and fertilizer industries, experimented with advanced techniques for metallurgy and compressors, and produced equipment for synthesizing diamonds. At the same time, the plant continues to function as a job-shop: When a heavy chain on a 10,000 hp diesel manufactured by the Hutung Saipyard was found faulty and someone higher up insisted that it should be substituted by an imported chain, workers of the Ta-lung Machine Works overcae all difficulties and provided a high-quality chain tQ make sure that every - rt of the diesel was of Chinese origin (Eastern Horizon 15.5,976):40). Features shared by most of these plants include moderate size, a lengthy and varied industrial history, often including repair work as well as manu- facturing, and a substantial proportion of equibment which is old, self-manu- factured or both. Despite their low priority in Chinese investment policy, and hence their lack of advanced capital equipment, these plants, clustered in Shanghai, Tientsin and other centers of China's pre-war industrial development, form the cutting edge of Chinese technological advance. Their primary function is to respond to shifts in domestic demand by providing an appropriate mixture of embodied and disembodied (through training and consulting programs, conferences etc.) technical change drawn from both foreign and domestic sources. Chinese sources make it clear that Shanghai, whose industry is dominated by small and medium-sized olants of the Zype described above, is Chna's oleader. 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Ч р. .-� •гi N • � Г7 •-i .д Ч - и ^ г� [.3 • ! г Н�.q о � rn � Ф U анз +-� г� О и а.• г'л1 Q/ О гд л7 N ав а1 гл • t '� F1 •г-1 !-а п! Е.э N `д •л р iз '� •+ т1 п! ;J гц С: �(1 V' р. U сЧ Ч � .>~ гV И л) •д Чл Пt ,-а � л� О •r1 �l Lt JJ � i� О Ч �-+ 4-f Пi � � (� .`L С1, rT 1 г 41 N r� 41 .-+ � •L1 � Н р гU .-1 о .-1 •L1 Ч � У; и п1 . г р.r. .т� r и гн о � м о .-! N q •л гн л+ а ;к •гi гз id � аз G v � о о �, v р и� ш Ч й о й � о Ч г �'• `г и .г, М N О Ч � п1 пг д� о р ш а ,1 ,, Ч z и сд .-+ ш •л и i, � и. л �� .r, и .л Ч и ги а► а► .о q � и о • р, гы г г . о г с N W ri аЧ.1 сд л) N л1 •г1 •(_.' д'-а А-. О 41 лi 41 • N •ri О � г Ч ц-1 л1 и а1 •д р� т сид -д � а го о. bo .г' � о р •.а л1 и й п, р • i 2 w� и р .-! .-+ ш р С и � ш ,� •ct СΡ о р. и q Е; •-л 3, •г! �i, N л1 и а1 L7 п1 л1 п1 i.� •л v Ч N •3 •� и •гi N оз л г � ги ,�, � t� � а! и Ч � •л о j r ' Е-! и•+ Е-+ •г � ш ••-1 v •л и .г ; �, .-г д.`�i q t7 и ^ i. г ш +з � Э г� •, ! г�. 41 сi N А cq ;*, rj, •.-i и �С1 гл Ч н [1 .� Ф � и а1 яi b }! •, i о о N r� с, � ct-1 41 '� У -i •.-I .L' .-с с О и •. с [: ?: Ш ш р •i Ч д й О Ф N О й Q �. р, v '!� ггг .ггi а1 .n t� л1 гн р. г! и •д ,д _ �г гд •п о) ЕаЭз --} гд n П. the operation o-; zhis second group Of enter17z-!*.ses depends on mainta4_14:1- hi-h de-ree of skill intensit'Y, and this in turm limits the e=ploymeat potential of these plants as a whole. C3. Small-scale industry The general features of China's small industries require little elaboration; they are described by several authors (Liskin 1971; Sigurdson 1975, 1977; RSSI). Small plants located in county seats and rural areas are relatively easy to equip and can make use of small local resource deposits. Rural industry can reduce rural claims on overburdened national trans-oort facilities and cater to local recuiremeats which-urbaz iadustr7 tends to overlook. Properly managed small plants have relatively low capital costs and short gestation periods. By meeting local demand, small industry can. reduce the pressure on urban output, allowiag advanced units to concent=ate on innovation and quality control rather than maximization 0.6 current product volume. And to the extent that small industry is financed by local accumulation, growth of this sector leads to higher investment without higher taxes, surely a desirable feacure in any socialist econc=y. Ih e initial i=etus towart e=ansion of rural industry came at the and of the =__ (1953-37). However, premature e: pansion of small olants euriing the Great Leap For-ward (1958-60) lee- to waste and confusion, and many small plants were closed down durin- the recrenchment of 1,960-62. Then, as ag=J :ultural conditiozs st abilized and the Cosc at: --,-,--a . --acLined, -once --ca.;,. --ndust-zi-I :-SSCL:Z :aS -or-,7-jZ:a, S=a' 42C:: r* E 4 _es e:=an( -- _::_ad__ 64 since about 1963. Careful attention to pilot projects, cost reduction and quality control has led to greatly improved results. In 1964, for instance, the Hsin-hui (Kwangtung) Farm Machinery Works tur7ed out power tillers at only 55% of the cost of useless models produced in 1960 -(Nan-fanz iih-oao, April 18, 1965; by 1972, output had risen to 2,700 units - BBC IW706 (1973), A12); a Kiangsu pilot plant tripled earlier results in amonia manufacture (SC2P 3534 (1975):22-23). As a result of continued investment in rural industry, most of China's 2000-odd counties are now active in one or more branches of the producer sector. In 1971, reports indicated that "more than half of the counties had established small machinery, chemical fertilizer, cement, and iron and steel plants and small coal pits" (SCM'P 4992 (1971):28). In 1972, 96% of all counties were reported to operate workshops for making and repairing farm machinery (Peking Review 48 (1972):17) and in 1974, 80% of counties possessed small cement plants (ibid..2(1974):23). Small industry is not spread evenly over China's rural landscape. One Chinese account notes that "local industry has developed on a larger scale and at a faster speed in provinces that have a much better industrial foundation" and are therefore better equipped to aid new enterprises with equipment and technical advice (Peking Review 39(1971):9). H-illy districts with mineral deposits and hydropower potential, areas with unusually high or rapidly rising levels of agricultural yields, and counties close to urban industrial centers all seem to enjoy above-average success in expanding 5-4 sze anc scope of '-ocal nc; :r7 ._cw --a~ i wstla -sca-a LZcLZ:-- sac:-277 azDroac- t-4 -we musz:izo:z :hat r,rs!. zu~'~:~7:7*ar,e:~:ec. :-,o saz--z the collective and state-owned sectors. The collective sector consists of enterprises cwned, financed and managed by communes and their constituent brigades and teams. We have limited information on the scone of collective industry, but there is no question that processing of grains, cotton and other plant products, handicrafts, repair of farm machinery, carpentry and other sideline ventures predominate, although some communes also engage in coal mining, hydroelectric generation and manufacture of machinery, cement, fertilizer and other producer goods. In 1973, "industry under collective ownership accounted for 3 percent of the fixed assets, 36.2 percent of the industrial population, and 14 percent of the total output value" of all industry (Chang Ch'un-ch'iao 1975, p. 6). The state sector of rural industry consists mainly of enterprises operated at the county (hsien) level. These plants derive their fixed assets from the state budget and remit most of their profits to the state. They are' typically located in or near the county seat, which is often a city of some size, and are much larger and better equipped than commune enterprises. The bulk of the producer goods output of small industry, which is estimated for the year 1972 in Table 3.8, appears to come from these county plants. Estimates of the size, in terms of output and e=loyment, of the collective sector and of the so-called "5 small industries" are shown in Table 3.7. Calculations shown in this table draw on the more detailed estimates of small plant output and eloyment in Tables 3.8 and 3.9, These figures undoubtedly contain errors, but there can be little doubc of :he zenera' validit of the following 'onclusions based on 0abLe 3.7. Firs:, :s zlear :naz: :e3-4::Z :he Pe' 7o of Sr.a--I_cU inu:r_ Z- lzo: a:5a.o.anc --l-z-u: in.e -- ---- n 66 Table 3 .7 Industrial Output and Zmrloyment in 1975 Grass Value of Industrial cutput per Indstrial Cutzut Zmloyment Worker 3ill. 1952 yuan millions ruan 1957 1975 All industry 457.26a 39.3d 8,128'- 11,635 5,3699 State sector 393.244 2484 15,857 Collective sector 64.016b 14.54,415 "5 Small Industries" 26.,63c 5,630 a1974 estimate from Rawski (1977a, Table 111-37) projected to 1975 using the 1974/75 increase for aggregate industrial outout derived by Field, Lardy and Emerson (1976, p. 17). bTotal apportioned between state (86%) ad collective (14%) sector as reported for 1973 by Chang Ch'un-ch'iao (1975, P. 6). Handicrafts are assumed to be included in the !4% collective outout share. 01972 estimate from Table 3-.8, projected to 1975 using the output index for producer goods shown in U.S. Central Intelligence Agency (1976a, p. 1). dTable 2 .5. Handicraft employment is included in the collective sector.. eTable 3.9. Exclusive of handicrafts; data from Table 2.5 and 1.2. Chen (1967, p. 210). ETIU.S 7of handicrafts; data from Table 2 ,5 and N.R. chen (-967, p. 210). 67 TABLE 3.3 ESTIMATED SHIARE OF THE "FIVE SMLL INDUSTRIES" IN GROSS FACTORY OUTPUT FOR 1972 (billion 1952 yuan) Product or Sector Gross Value of Fac.ory Output Small-scale Total Small-scale Share (%) Chemical fertilizer 3.643 2.186 60 Building materials 6.480 3.240 50, Farm machinery 13.009i 8.'716 67' Electric power 6.589 0.395 61 Coal 4.834 1.333 2S Iron & steel 22.108 3-.979 18h Other 290.883 0 0 Total 312.991 19.869 6.3 TiRgures in this column are 1rom ,avski (1977a, Tables I1-21, 27, 37, 0Calculatad from Field (1975, p. 166) on the basis of his tonnage esttes. c Small plant share of 1974 cemer.-t outrut as es timated in- MacFarlane (1975, p gricultral machiJnery and equipme at accounted for 6-7% of overall 1956 =achinery out-cur (Chao I-wen 1957, p.. 43). TMis share is assumed to have risen to 15% by 1972. Total 1972 :achinery outut f-rom Rawskl (1977a, Ta10lc IZZ-7), e1966 figuare cited by Rizskin (1971, p. 271). Sma« ilants account for 20% of hydropower canacity (?ekp Review 21 (1975): 30-31), which in turn accounts for an estima-ed 28% of ag-g.epower gezierati--ng capacity (Rawski- 7973, p. 27), 7 assu=me tha-, s !ares in carac ity and zu-:u: are id::ca.. ~~ere tcr:.,:d in 3-C, C5., 68 Table 3,9 Estiated 1975 EmPloymeat in Small-Scale Producer Industries Chemical fertilizer 224 Cem~e t 134 Machinery 2046 Power 41 Coal 1810 Ferrous =etallur.7 480 Total 4735 Source: Appendic A. 69 particularly building materials, chemical fertilizer and farm machinery, small plants provide only a fraction of overall industrial output. The five sectors included in Table 3.8 account for 6.3% of estimated 1972 industrial output; inclusion of less developed small industry sectors for which data are not available might add one or two percentage points to this total, but no more. It is therefore evident that despite the expansion of rural industry, urban industry large-scale4has retained its position as the leading force in Chinese industrial expansion. Second, the collective sector, which partially overlaps with the "five small industries" also accounts for only a modest share of industrial output. Many of the 'collective enterprises which appear to be included under the rubric of "industry" are engaged in activities which might reasonably be classified as non-industrial. Cotton ginning, flour milling, rice hulling and other types of crop processing, as well as self-consumed handicraft production, formerly (during 1953-57) included in agricultural output, are now assigned to industry (Field, Lardy and Emerson 1975, p. 5). These 8 activities generated about one-Bzurtici collective industrial output in 1975. Vurther semi-industrial activities apparently included in the collective industry total include carpentr1 shops, mac-weaving, baskacry,and sawizg and embroidery shops as well as other types of traditional crafts. These activities, which are not new to China's countryside, are of: course increasingly mechanized, and hence "industrial." At the same time, however, it is significant to note that part of collective industrial output consists of modernized forms of tradiional farming and cra: activities, and : nuie new ac=i suca as zenu='r o -eaz, ei rs d zachinery, :aribu: onl- a modest frac:izn z :ctal tuZ=U: of -i 70 industry. The third set of conclusions which emerges from Table 3.7 concerns the impact of rural industrialization on rural employmenc patterns. Our data show that the direct employment-impact of collective and small-scale industry is extremely small. - The combined 1975 employment total in collective industry (including handicrafts) and in the "five small industries" is 19.2 million workers. This figure is far higher than the actual level of industrial employment in rural areas, because: 1. To the extent that collective'enterprises produce commodities listed listed in Table 3.8, their employment is counted twice. 2. Most of the state-operated enterprises whose output and employment is estimated in Table 3.8 and 3.9 are located in county towns; their employment is really a portion of urban rather than rural employment. 3. Some collective enterprises are located in large cities, often as adjuncts to major plants. 4. Since collective enterprises in the countryside often use part-time labor (described as vi-kuns vi-nung or "both worker and peasant" personnel), the collective employment total shown in Table 3.7 may be much higher than a full-time e=loyment figure. Although the 19.2 million figure excludes stace-sector small-scale plants in industries other than those shown in Table 3.3 (taxtiles, food processing etc.), such plants appear to be relatively small in number and also tend to have urban locations. I therefore conclude that 15 -illion is a very generous estimate o: _-ie -ndustrial employmenc in rural areas for 1975. A:hcugh this azu t:Dver :ne-=,, c: e=Ic,,=e:i..z4-, wo7,cZ=3 7alprese: -=cer _5. _-f :-e l '- a.a'_cr :--z `ar-79ac 4n S~ SIOW : .T hosta he 14 i~. ~iis: .co e' 71 county level applies in practice to China as a whole rather than to only one or two provinces (Sigurdson 1975, p. 412). The technical level of small-scale plants is described in considerable detail in RSSI. The basic conclusion of the Rural Small-scale Industry group was that the plants toured by the group, most of which are identified by Chinese hosts or Chinese press reports as leading units in their field, are effective and productive enterprises which have succeeded in using modern industrial technology and equipment to produce useful outputs. With some exceptions, notably the widespread production of aTonium bicarbonate, a fertilizer product which appears unique to China, the materials, equipment, processes and products encountered in Chinese plants were not unfamiliar to American engineers and social scientists. Apprentice machinists were performing the same tasks assigned to apprentices at General Motors; fertilizer plants and tractor models resemble U. S. plants and tractors -built during 'World War II; a temporary disruption of operations at a Peking steel rolling plant reminded visitors of similar experiences at steel mills in Brazil and Canada. Small plants in any particular industry appear to include units operating at widely differing levels of technical sophistication. Chinese publications describe tiny plants rigged with primaitive home-made equipment; these units are not shown to visitors. They appear to contribute little to aggregace out-ut. Their function is to develop rudimentary agricultural support facilities in areas which are zot able to receive industrial farm inputs or capi:al ecui=men needed to produce far= inputs, due to remote locaCizn zr :he iaadeuacv 3: cus:rial zut. ?itive plants also se=e ascaizing grounds :zr :aczre expansion and zggrading. 72 The frequency with which small plant cadres are noted as having backgrounds in reair work or in "backyard" industrial activity suggests that the Chinese set considerable store on experience gained in often unsuccessful struggles to develop industrial activity without specialized resources. The history of China's urban industrialization, which draws much of its technological dynamism from enterprises with similarly feeble beginnings, provides strong support for a policy of encouraging enter-rises with varying degrees of sophistication in ters of equipment, experience and ability to contribute to economic growth in the short run. The bulk of small plant output now comes from fairly large and sophisticated plants of the type shown to the Rural Small-scale Industries group. These plants are often neither small nor rural. County plants are Cypically located in or near the county seat, which may, as in the case of sinhsiang, Honan, one place visited by the RSSI group, be as large as 450,000 persons! As for size, the average employment level at 18 county plants toured by the RSSI group was 379 workers (RSSI, Chapter Four). These plants operate large quantities of machinery, sometimes including items obtained from leading national-level plants. At the same time, they invariably possess substantial machine shops which produce considerable quantities of equipment for their own use. Although small plants tend to use less capital per worker and per unit of output than larger units, leading small enterprises deploy substantial quantities of: equipment per worker, :requently including automatic machine tools and other sophisticate i:n7s. urther=ore, falling machinery prices (boach absolez and re>aie :o llbor _=c=aase laz or lrcc:.~ ead :3 an- inczaasingeei-- ~ canz--- 73 hence cazital intansity in plants visited by the RSSI group. The contribution of small plant output to China's economy can be assessed by comparing the cost of products from large and small enterprises. Transfer prices for producer goods in China are set substantially 'oelow market-clearing levels. I assume that current market-clearing prices for small industry products, while below the 1957 equilibrium levels because of intervening industrial growth, remain above the actual transfer prices of 1957. This assumption cannot be verified. But in view of substantial post-1957 increases in farm-gate prices, rural purchasing power and stocks of comlemen,.ary believe resources, it is difficult to that rural users would hesitate to buy additional supplies of fertilizer, machinery etc., even if these were made available at 1957 prices rather than the so-swhat lower prices now in force. Under this assumption, 1957 costs and prices become a useful standard for evaluating the present contribution of small plants. Tables 3.10 and 3.11 present scattered input and cost data which show that in comparison with large plant achievements of the 1950s, leading enterprises in today's small- scale sector often require less capital per unit of outpuc or capacity and attain lower average costs. These small plants definitely make a -ositive contribution to the economy. Since Chinese planners attach positive value to industrial dispersion and to rural involvement in modern-secZor activities, and since Chinese cost calculations exclude interest charges on fCed capital, =odest excess costs in the capital-saving small sector are also compatible with this favorable evaluation. 7He above zonclusions are based on =,o assumotions: :hac Chinese csts and Drioeas i a Zmde:cin:rzz n :za: ~maU oLa: ooducs ae ~cd sbs_`ora 13- 7~ :cuczs : 74~ plants. I believe that the first assumption is valid; however discussion of this issue is beyond the scope of the present report. The sezond can claim considerable empirical support (RSSI, oassim; Table 3.12 below). Data in Table 3.10 show that small-scale producers of hydropower, synthetic amonia, steel products and cement use considerably less capital per unit of product than large plants built during the 1950s. Small coal 01 mines also require less investment per ton of product than large mines.1 At the same time, these data also illustrate the substantial capical intensity of-some of the small plants: construction costs per employee at the Lin and Esiyang county fertilizer plants exceed the 1955 national average of fixed assets per production worker in chemicals; at the Nanhai county cement plant, construction costs per worker are more than double the 1955 national average of fixed assets per production worker in the building materials sector (1955 data from N- R. Chen 1967, p. 260). Substantial declines in machinery prices over the past two decades add to the significance or these observations. Turning to Table 3.11, we find considerable evidence that costs at leading small-scale producers allow their products to be sold profitably at prices below those charged in 1957. Fertilizer costs are relatively high in the small-scale sector, but small plants can earn substantial returns even 11 with selling prices which are lower (per ton of nutrient) today than in 1957. Both cost and price fall well below the 1957 price at several small cement plants. The single citation for steel products shows that a small county plant sells ins reinforzing rzds for less than :he ascimated 1957 average nclesale :rice for steel products used z _onszruction. Cr.- im :ne :ase ZE *~=zncer n e fnd n Osa=zltzn SnC'wIMc" aeZCsC e:7cass :aver -3 ?ziza Levsi :-ae sma-1-scaleac:: Table 3.10 Capital I_tcczity and Productvityr Indicators at Large and Sma11 Plants K c L K /L K /L c cc (mil. 1000 yuan yuan/ tons/ yuan) tons/yr.. ton =an-yr orIa (or kg) (or yuan/k7r) Z21s~, 1.950s -M"'rePrt. Pl. 220-260 120 2000 Plant 100 20 5000 I. Plants d d -ang (Uangsu) 7.0 5 1400 Zsijang (Shansi) 7,5 10 450 16,667 750 22 Li-. (Eonan) 6.0 7 520 11,538 857 13' ,ent m",iz Plant (1959) 360J 1200 300 atv'ung PI. (195cs') 32" 450 115.6 ;mal*r Plants Li- (Honan) 0.34 25 12 Tachai (Slansi) 0.35 20 144 2,430 17.5 139 EuI (Honan) 50 500 100 aai (Kwastung) 5.0 103 -549 9,107 48.5 128 rdrzlectriz tower arEg Pia.as, 1955-57 1305 1958-62 plans. 7 Dmall Plants - Eu.ichou (An wei) 5.6b 7830 kNb 499 plant6 uC n 6.6% 7100 1kv 932 79 Plants• .-vn d St e Large and d Planta , A large Plant 1000+- 1500 667 Shm (ekig) 20,000 1000 50 18 =ediu= plants 600-700- 1100-1200 565* Szall PlanS e e I Scall Pant .145 -3 4 83 A Small ? Pan t 15-16 30o-4o 4-43 iIus i _ 10 805 12 1'1 S~~a Ste2. 'be1 76 Table 3.10, contilued Notes: X = construct±ion cost c L = employcent = output or capacity in thousand annual tons ( in kw for power plants indicates =id,oint of data range. a Ozoe (1964, p. 314). bBc W804 (1974), A7. c cSigurdson (1974~, :p. 79). dJPRS 31.510 (1965): 1-2. 3c w686 (1972), A9. JMJP August 19, 1957. jM~P April 14, 1958 Zited i Chen and Galecson (1972, p. 117). Capacity is given in terms of fertilizer; therefore capital cost per annual. ton of a=monia output should exceed the ffigure given here. JTable 3.5 and Jung-chao Liu (1971, p. 130); 120,000 tons is the 1959 output. 'Furui (1959, p. 19). :'33c w895 (1976), A6. .2ei-ch'ing nien-zao (1967, p. 939). 77 Table 3.11 osts and Prices for Products of Large Plants (1957) a-ad S=all Pincts (1975), in yuan per ton or per kv Ztea and Data for 1957 Data for 1975 Rd-cer ?r o duc tion Fric e Pr oduc tion P Cost Whole- Reta4il Cost Whole- Retail sale sale net55a J-- -- --- , n 6ob 80" aclia. (Shansi) 30 33 Ln (Honani-197O data .36e 47c ediuc plat, ,00000 tons/year 310 he cal Fertil.izars anoian nitra to-, 125d 310-316d (625) (1550-1580) siyan. (hansI) .200 260-265 300 (1000) (1300-1325) (1500) :z=ia bic artonate: ria (acn an) 130 180 (763) (1058) ydr o el ec tr ic pco-er .CO52d Lin. (onan) .035 .048 :t ee i Pr cdue ts 6é2a .u$sia (cianssu) ' .appox 500 Data J-n parentheses show ccsts aad pr'ices per ton of citrogen co=tect. Oource: unless otherise noted, data are fr= nteriew =aterial recordd by the Rura! Sall-acale industtce DelegatIon, Jn-uy 1975 a".Farane (1975' P. 319). The fig:re steel is t av cw wholesale price of Steel priduct a used-7 in const«;uct'ion. -tai pricc is: the p:ricEý ofotiespie:i.ldnrrasot ags SIg=rd son- (1974 p- ) i.56 fioe frt. L Chen (1967, p, 2-0). 78 Table 3.12 presents data on diesel engine production in 1956-57 and 1975. These figures show that current products of medium and small plants copare favorably with products of the larger Peking and Wusih enterprises, and are both lighter and cheaper than engines produced by the larger firms in the mid-1950s. Even a commune plant just beginning to produce diesels can now match the =FFP cost performance of major enterprises. The imnression that current products of leading small plants comare favorably with the earlier products of major firms is borne out with regard to other products as well as diesels. in machine tools, for example, county and commune olants regularly turn out lathes of the C-620 series which were regrded as advanced items when first manufactured by major enterprises during the mid-1950s. These results indicate that particularly in the manufacture of fertilizer, cament and machinery, small-scale manufacturing enterprises have demonstrated their ability to raise the volume of output and reduce capital inputs without significant cost escalation. Although average small plant performance undoubtedly lags behind the standards achieved by leading units, there is every reason to believe that growing numbers of small factories will gradually su _eed in attaining the performance levels described in Tables 3.10-3.12. We thus conclude that direct cost comparisons strongly support zhe view that rural industry is making a substantial contribution to China's national devclopment effort. This oositive evaluation of small-scale industry is zeiaforced by considering the imacc of local industrial ex;ansion on :he ac.ri.cultuza-I sec:-r )-. Thina's ruzal eccnomy, a tni: :o 'De discu~ssed 4in- Table 3.12 o Chinese Diesel Eagizea, 1956-57 aad 1975 morse- ïleiht ?-g/hp Cost o' Cont/hp power kg productioz yuaz Data ror 1956-5 hi.ac (rha-tUng) 84a Cgu iesel PI.b 91 - , 40 1202 30 eir.ang (Shantug) d0b b 2b 1.17 117 a 0260, 26" 2anhag (iangs·) 12a - a a 5850 16a 580a" 36a .eantsiz Int, Comb, ý)I. a=al 6,0b nspcifed 300' 130 43 d stcfd a-s t 200+ pr-sent (1956) 150- adva=ed Units, 1956 110d Da_ta for 1975 (Col-lected by Ruzal Small-scale Industri-es Delegýation1) n Int. Cmb. 45-65 3200-4000 60-70 old mod1 55 550 10 :iEw --odel 60 340 5.7 aia(Kizzgsu) -2ies:el. 12 130 1. Redia-SallPlazt3 T'ayun 3has) 10 16 1. nyang (Hionaa) 12 130 10.8 800 - 67 S-nsian #2 (Ena) 12 150 12.5 700, 58 Tzu-c'I (Cekiag) 3 39 13 'lUsih County Pl. (:<ansu) 4 40 10 Ch'achou (Kangu) 12 130 10.8 Skaga' Power Mach. PI. 35 310 8.8 Shanhai Ma-lu Co=u=a 3.5 38-42 1i.4- 550 157 idates aidpoint of data ran-ge. "Ch'oku uryg e5 11 (1957), p, 17, 42. a Hsm-mriz (1957, p*_ 5)., .30, 9d ,ma 13,19 e?.ies paid 'cy prhsr 80 D. Institutional determinants of industrial emoloyment Within the framework of industrial objectives, technology and enter- prise structure, there are strong incentives to raise productivity and hence to limit labor requirements. Institutional factors thus exertise a restraining effect on the growth of the industrial .abor force. Chinese economic planners are highly conscious of a trade-off between consumption and investment. Since wages in the state industrial sector, including county-level plants, are substantially higher than incomes of comune members, transfer of agricultural workers into the state industrial system raises aggregate disposable income and hence, personal consumption.13 This not only reduces investment, but also necessitates. reallocation of reduced investment outlays toward consumer products in order to avoid excess deman 14 and the consequent inflationary pressure. Tn addition, state-sector employees receive pensions, medical care, child-care facilities and other fringe benefits not normally available to commune members. Urban housing, which appears to be heavily subsidized, adds substantially to the cost of higher employment in the state sector. Here the costs take the form of non-productive investment. In Sian (Shensi), for examle, a 1957 report indicated that for each additional person living in a single story house, it costs the state more than 500 yuan of investment for residence, public construction and municipal projects. For people in unheated buildings, 700 yuan, and for people in heated buildings, 300 yuan. (Chi-hua hin-chi December 1957, o. 25). 'MIeSe rZaU4=e=ea:s "orzed the state zo -*nv-est =ore :u ncs 4:res4cen::al z:i:ninrin 135-7 : -az -qere ex--e:ided --r et~: -v:e :ze-.-anc-., oo-aw' :asc: r evenr. ~ r A~:n - 81 Planners' perceptions of costs attached to higher industrial em Loy- ment relate primarily to employment in the state sector. Commune members eloyed in collective enterprises at the comune or brigade level are paid in work points rather than in cash, live in privately financed housing, and enjoy only those fringe benefits which are extended to fellow members of their comunes. At the enterprise level, eployment growth is limited by the whole structure of Chinese economic planning, which encourages managers to make the most of existing resources. Zxpanding output by increasing labor productivity rather than employment creates a gap between potential and planned outout, at least in the short run, which increases an enterprise's ability to withstand unexpected breakdowns -of equipment or supply lines without endangering plan fulfillment. Rising productivity also facilitates attainent of targets for quality, cost and profit, which in turn attracts favorable attention from superiors and enhances the fim's prospects of obtaining investment funds. In an economy in which real industrial wages have noc risen percecibly over a period of two decades, it is probable that worker morale responds favorably to innovations designed to reduce physically taxing, hazardous and unpleasant tasks. Such reforms demonstrate managerial concern with workers' welfare, an important aspect of Chinese political ideology, and are also likely to raise productivity. Sliding seats for machine tenders in textile plants, auzmazic bagging az fertilizer and cement plan:s and yen:ia- :i=n and dust removal a textile and -arent lan:s are exa=les of ncracizis which2 na- be desiged prirariy :.Z -PZrove workzig cn::i ns, bu: aso hava :hea:isc: ofizcreasing cai:al.-iz:esi:7 and srduZc-ivity iZ iZduScr. 8,2 Finally, employment growth is limited by bureaucratic obstacles. To obtain new workers, factory managers are required to make formal applizacion to labor bureaux which allow added hiring only after an inquiry shows that the new workers are genuinely needed (Eckstain 1975, pp. 362-64; R1SSI notes). A similar procedure is necessary to obtain allocations of state investment funds. But investment funds, once obtained, are virtually a free good, for there appear to be no interest charges placed on capital grants. This certainly biases choice of technique at the enterprise level toward capital- using alternatives. In addition, and perhaps more i=portant, is the fact that most enterprises can fulfill at least some of their equipment needs without entering into the application procedures described above. The high degree of vertical integration in Chinese industry is discussed in many sources (e. g. Richman 1969, p. 796 ind Rawski 1977b, Chapter 6). The relatively inflexible (in comnarison with a market economy) nature of China's system of industrial resource allocation gives industrial managers strong incentive to develop ancillar -acilities under their own control. Repair shops, which can alter or ret ir existing equipment, produce new and i-roved machines for self-use and, in some industries, contribute to enterprise output at critical times, are especially prized. The widespread existence of foundries and machine shops attached to factories in many sectors and the apparent ease with which they acquire raw materials undoubtedly creates a bias toward expansion of outmuz and product quality along capital-intensive lines. . onclusin 1z -we ta;e fund that che re:acivel ncdas: e=plzy'en: :zeDonentf .7himese ndus::ia exzansion can 'e exIa n :z= 83 Chinese industrial strategy, technological altarnatives and institutional patterns. The prevalence of substantial capital-labor ratios and rising labor productivity in all types of industrial ente=rises means that the task of absorbing large new cohorts of workers has fallen predominaitly to the agricultural sector. Absorption of labor in China's agricultural economy, and the contribution of industry to the process of enlarging the demand for rural labor, is the topic of the following chapter. ChaDter Four Rural Labor Absorption, 1957-1975 A. Introduction The combination of substantial labor force growth and modest expansion, relative to output growth, of non-agricultural employment revealed in Chapter Two means that if a low level of unemployment prevailed, there must have been massive absorption of labor in China's agricultural sector, which is here broadly defined to include farming, water conservancy and land imrovement work. In Chapter Two, we concluded that on the assumption of a high population total, China's labor force increased by an estimated 139.6 million persons during 1957-75, of whom 65.3 million entered non- agricultural pursuits. This leaves a total of 78.8 million to be absorbed into agriculture (Table 2.9), assuming no ruml unem.loyment. In addition, the massive growth of labor-augmenting mechanization has reduced several components of rural labor demand, thus en.lau;ng the potential labor absorption problem. The materials in this chapter will show chat this potential pro'ole- of absorbing a growing rural work force has not, in fact, materialized. Available materials point strongly to the conclusion that China's agriculcural sector has, in the past two decades, successfully absorbed a labor force increase of 30-3.5% without significant additions to cultivated acreage. Despite this substantial increase in a man-land ratio which was already high, we will see that both the number of workdays per laborer and zutzuz value er =az-year have increased rurig :he -as: .o dec,des. 85 B. China's agricultural system Before discussing rural labor absorption after 1957, we should briefly note several points about Chinese agriculture prior to thac date. Chinese farming is characterized by a high man-land ratio.which has encouraged the development of systems of intensive culture in which large inputs of labor, fertilizer and, when available, water, are applied to small plots of land. As an early twentieth-century observer remarked: Almost every foot of land is made to contribute material for food, fuel or fabric. Everything which can be made edible serves as food for man or domestic animals. Whatever cannot be eaten or worn is used for fuel. The wastes of the body, of fuel and of fabric are taken back to the field; before doing so they are housed against waste from weather, intelligently comnounded and patiently worked. . .to bring them into the most efficient form to serve as manure for the soil (King a.d., p. 25). The resulting farming system is more akin to gardening than to Western techniques of extensive farming. In the case of wet-rice cultivation, the predominant crop in many areas of south China, Geertz has observed that output can be "almost indefinitely increased" by fine-comb cultivation techniques, and that "The capacity of most terraces to respond to loving care is amazing" (1966, pp. 32-35; cited in E. S. Rawski 1972, pp. 13, 188). Another view of the intensity of Chinese cultivation practices comes from the following data on labor inputs (man-days per hectare) compiled by Stavis (1977, p. 64): China India I=7igats Wheat 225-30 65-122 Me 225-450 70-Z00 ?reparacion :f ccoos: 73-375 =cc practised This system of intensive farming supported a sevenfold increase in population during the period ca. 1400 - 1950 with no apparent decline in per capita consumption of foodstuffs; although part of the increased grain output came from newly settled lands, a substantial portion was the result of rising yields (Perkins 1969, Chapters 1, 9). It is thus obvious that China possessed a highly developed farming system with few areas in which tradicional reforms (i.e. excluding modern farming inputs) could yield shar increases in output. Despite its success at supporting growing numbers of inhabitants at constant living standards, China's agricultural system was unable to provide .full employment for the farming populace. Survey data from the 1930s show that seasonal idleness existed in all farming regions, with most regions clustering near the national average of 1.7 idle months per able-bodied rural male (Buck 1937, p. 294). The seasonal distribution of idle time, show in Table 4.1, indicates that seasonal idleness was clustered during the three months beginning in mid-Nove mber. During chis period, a typical male worker would be idle for 1.7 x 30 x .80 or approximately 0 days. At the same time, the intensity of the farming cycle was restricted by seasonal periods of peak labor demand. Survey data reported in Table 1.2 show that over four-fifths of localities surveyed experienced labor shortages at some point during the annual cropping cycle, most often at harvest time. This patzern of seasonal peaks and valleys in the demand for farm labor shows both the potential and the danger of farm mechanization, which zan allow fr:her inensification of :he roping v Dle by breaking abo botleuec z, bu may a1sc *'isplace laocr and ex:znd :e p6hancenon seasonal -4-'leness, 87 Table 4,1 Percentage Di3tribution of Idle Time By Months 1929-1933 J FJ J A S 0- N D China, all regions 32 12 3 2 1 3 3 2 2 4 11 25 Wheat region 32 13 3 2 1 2 3 2 2 5 1.1 24 Rice region 32 12 3 1 2 3 4 2 2 4- 10 25 Source: aurvrey of 15,013 fars, 140 counties, 22 prdvinces reported in Buck (1937, p. 296), Table 4.2 Agricultural Labor Shortage, 1929-1933 Percent of localities reporting labor shortage for the following All Wheat Rice fa.r operations: Regios Region Regie None 19% 15% 22% Hazrvesting 65 78 57 Cultivating 12 17 8 Planting 27 16 34 Plowing 2 3 1 igation 13 2 21 Source: suir-rey ofl 260 localities, 169 counties, 20 provinces reported in Buck (1937, p. 301). 88 C. Yajor developments: collectivization and growing supplies of modern farm inou The success of China's agricultural sector in absorbing large cohorts of new workers and in raising outzut growth to accomodate unprecedented rates of population increase can be traced to two factors: collectivization and the infusion of industrial products into agricultural production. During the years 1949-56, family farms were the dominant form of agricul- tural organization. rithim the context of faily farming, the Chinese government encouraged the growth of cooperative units: mutual aid teams, primary producer cooperatives and, in 1956, advanced producer cooperatives in which remuneration to members was to be based on contributions of labor alone, rather than both land and labor. In 1958, as part of the series of campaigns known as the "Great Leap Forward," collective farming replaced family farming as the dominant mode of farm organization. Peasant households were organized into People's Communes, which in turn were broken down into Production Brigades and Production Teams. Crook's estimates show that in 1974, the average commune had 15 brigades and 100 teams. Average population figures are as follows (1975, pp. 375, 388, 395): households Y persons estimated - of units Commune 3,346 14,720 70,000 Production brigade 220 980 750,000 Production "eam 33 145 5,000,000 The commune is :he basic level of gover-=enc and aainis:racin -na h.a. Cc ue i701-;emen: in; a 4:r is 1 , ~resr7, zana auoa=dr-, and zult'vt zft orcz~aar-s. unam.sw:n 'C x=a -4z --n -'-alzh :a=a and secor-4=z-;- z-c i s :f:--n ::n i 7a 89 a variety of industrial enterprises, especially in the fields of food and fiber processing. In recent years, growing numbers of communes have moved into other industries such as metallurgy, machinery repair. and manufacture, hydropower and building materials. Production brigades have grown in importance as centers of rural economic and political life. Many brigades now have headquarters buildings, Communist party branches and militia units. 'Brigade headquarters often house local branches of credit and supply-marketing cooperatives. Brigades also operate primary schools and cooperative health-care programs. "The brigade receives state plan targets, compulsory state procurement (grain) quotas, and schedules for delivering grain taxes and then works out plans with its teams to ach4eve these targets. Brigades continue to mobilize the rural labor force to build roads, canals, and water conservation projects" (Crook 1975, p. 391). Brigades also operate sideline activities such as piggeries, equipment repair shops and foo1 processing workshops. The production team is the basic unit of agricultural production and income distribution. Production teams are responsible for tillin most of China's farmland. After the har-est is collected and shares owing to the state (taxes and compulsory grain delivery quota) and to the team itself (for purchase of current inputs, compensation of team leaders, repayment of loans and replenishment of the team's welfare fund) are deducted, the remaning income is distributed to team members in ?roportion to the number of work-points accumulated by each oerson during =he preceding year. Wark- point s-7szems ara noc uniforao but are =eneral!y based on labct--ays adj.rEd a z_eerc: 2-ne :rang, ec iodividua. caz ne.mbers. 90 The primacy of the small production team in economic accounting and income distribution appears essential for preserving a close link beween effort and reward in most agricultural regions. Although some unics, such as the Ta-chai Brigade, a national agricultural model unit, have snifted the basis of accounting and income distribution to the brigade level, China's 1975 constitution includes a provision identifying the production team as the '"basic unit of accounting." In addition to the collective lands cultivated by commune members under the leadership of team cadres, most rural households are allowed to cultivate private plots measuring about 57 square meters an average. These private plots account for approximately 5% of arable land and are devoted to raising hogs, poultry, vegetables, fruits and other high-value oroducts. Estimates of the share of peasant incoraes derived from private plots range from 5-10% (Crook 1975, p. 404) to ,a more realistic figure of 19.37 based on a 1965 survey of 10 communes (Burki 1969, p. 40). The initial problems -acountered by coMMunes, which contributed heavily to the consecutive poor harv7ests of 1959-61, stemmed from unrealistic and inexperienced management and from the incentive problems associated with distribution of income at the commune level. Growth of managerial e:periance and return of accounting and distribution responsibility to the team Level during the early 1960s have overcome most of these problems. This in turn has allowed the commune system to e.xploit the advantages of zollective agriculture, which appear to be the following: .ncreased cen=al zo-zrol over rzal Life in enera1, and over grain supplies in warnicuar, whiah incranses szace inzuence cver =,=al saving and in4esc=ent decisions. . .he possibili:; ooilizing seasc-al1y v e - a4or: zcnsWuc::o )-_7D7ec:s aesig-.ed ,c raise c.:z..u u, 91 This opportunity arises from the ability of the commune to internalize benefits of water conservancy, aflorestation etc. which individual households or small groups could not capture in a market economy. 3. Development of a closely-knit network of agricultural extension in which the farming populace responds quickly to suggescions from research institutes etc. (This of course has a potentially negative L=pact if, as occurred in 1958-60, the suggestions are inappropriate to local farming conditions). 4. Development of a diversified rural economy may be enhanced by the abilit7 of the commune to spread -the burden of risk or of start-up costs of new ventures over a large population. Diver- sification may include creation of new industries, growing new crops, or development of insurance systems for human and animal health care. 5. Laproved allocation of resources in cultivation. This includes specialization and division of labor among the populace as well as reforms such as levelling boundaries between fields to increase plot size and sown a7ea. The existence of collective agricultural units does not, of course, ensure that these potential advantages will in fact be exploited. However, following the initial period in which the net impact of collectivization on agricultural performance was strongly negative, the combination of growing managerial experience and sound economic policy at all levels of government has allowed the comunes to make an increasingly positive contribution to agricultural development. The second major change which has contributed to the development of China's agr4cultural sector since 1957 is the presence of 'rapidly increasing and, by the 1970s, large supplies of industrial inputs including power, =achinery, building materials, steel, petroleum produccs and che=ical frier r. THe pace f growth is ilustraed in aba . 3, ih shncws :.e Z=awing a.veragez a-'ul pwth races for s::cks and fows of Table 4.3; Growth of Industrial Inputs into China's Rural ECOnomy, 1957-1975 6 YU.t t: aI Small-scale Chendcal Inventory Data (10 hp) Power Cement Fertilizer Irrigation Tractors Power Total for 3 categories VMm v I u t Output & Drainage Tillers 100 lhp hp/cultiv ted .1 j , (ill:o6 tons Eqluipment clectare 0.1a 0 0.9a 0.6 0.4J -- 1.0 0.01 1t "0 1.6a 1.8 3.0 3.6 c -- 5.1 0.05 1963 2.1 2.5 1.2a 5.2 c 1.7j -- 6.9 0.06 304 2.51 2.2 5.9 7O c ] -- 8.8 0.08 190o 3.2' 3.9 8.9 7.5 2.0 9.5 0.09 f i ] 19/10 5.9 14.0 16.9 4.1 0.3 21.3 0.20 19/1 9.6b 9.2 16.8f 20.0 c k 0.4 25.1 0.23 1912 13.2 19.8, 24.0 5.3 0.8 30.1 0.28 f a s 19/1 14.9 24.8 30.0 7.2 1.2 38.4 0.36 '04 16.4 25,4 36.01 9.1 1.6 46.7 0.44 19 i 14 4e 27.911 40.01'-49.5 11.1n1 2.1 53.2-62.7 0.50-0.59 Note: teti Lizer output is in terms of product weight, not nutrient weight -- Iigligble Chao (19/0, pp. 139, 151). Rlupot.tt.dly six tlies 1962; cited by Wens (1977, Table 11-17). teakins'' (19751)) p. 360), Calhuilated from inventory data and a coostant figure of 107 million bectares for cultivated acreage cited i I id., p. 353. Table 4.3, continued e Hued on incl:eases for 1965-75 reported in Peking Review 41(1976):47. RawkAd (1977u, Table 111-21). MJcFriane (1975, p. 315). ITotal Or percentage increase from Current Scene 14.6(1976):10-11. S 3. Central Intelligence Agency (1976a, p. 13). U. S. Central Intelligence Agency (1975b, pp. 13-14). Linear interpolation between annual figures ahown in ibid. Previows year' s utock plus estimated current output (ibid.), lagged one-half year. 1¾ 94 several products: Rural power consumption, 1957-75 32% Small-scale cement output, 1962-74 20% Chemical fertilizer output, 1957-75 21% Stock of irrigation & drainage equipment, 1957-75 26-28% Tractor stock (in terms of hp), 1957-75 20% Stock of power tillers (in hp), 1970-75 48% Stock of three machinery types, hp/ha., 1957-75 24-25% The magnitude of these product flows may be illustrated by observing -that 1974/75 rural power consumption and small-scale czment output surpassed the national output totals for 1955 (power) and 1967 (cement). More generally, the final column of Table 4.3 indicates that the post-1960 expansion of farm machinery stocks has led to a significant degree of overall mechanization in Chinese agriculture. Despite the evident labor-intensity of Chinese farming practices, three types of equipment alone now provide Chinese farmers with considerably more machinery than the 0.19 horsepower per hectare that was available to Japanese farmers from all t7es oL power machinery in 1949-50. Since Chinese communes are equipped wich large numbers of threshers as well as lesser amouncs of other types of power equipment, it is clear that in terms of overall machine capacity, China is already approaching the 1955 Japanese level of 0.69 hp. per hectare 2 of cultivated land. The inpact of iLdustr-ial products on China's farm economy may 0e illuscra=ad wi:h raference to rural elec fzior. and farm 7achizary, ::Oh of hich .egan :c spread :apidly :hrough Ch4za's rural aras in :he - ?erhaps the lares: uanticacive imac: of laccrici:-r rura_ __plyn- 95 patterns has resulted from the mechanization of grain processing, which has relieved farm women of a ti,e-consuming chore. A knowledgeable county official in Kiangsu province informed members of the Rural Small-scale Industries group that prior to mechanization, there were two ways ,of processing rice. One was by ra=ing with a stone rod (mortar and pestle?) which might process 5 kg. in 2 hours; the other was a pedal-operated device which could hull 25 kg. of grain in 3 hours. Assuming that these data refer to the quantity of unhulled rice which could be processed in a given time period, feeding a family of five on a rice diet of 1000 kg annually would require processing of 2000 kg of unhulled grain involving 240-800 hours of work. Although these figures refer only to rice processing, they can give a rough idea of the order of magnitude of the labor released by mechanization of grain processing. If the average housewife devoted only 250 hours per year to this task, and assuming 165 million peasant households (Crook 1975, p. 395), then the annual pre-mechanization labor input into household grain processing becomes 41.25 billion man-hours, or assuming a work-year of 300 eight-hour days, the eouivalent of 17.2 million ma-years. If the average household devoted 800 man-hours per year to the task of grain hulling, the full-time equivalent would amount to 57.3 million man-years. These man- equivalents give only the order of magnitude of the released labor time, but they do suffice to show that in comparison with the estimated growth of agricultural labor force during 1957-75 of 78.8 million peraons, the labor ci=a releasedb this one asoec: of :he overall :Lpac: of e=c=rifiaiCn -was Cuize substanial. 'Achan-4-ed s~mighas also ral~eased Lre:a::e ffzi 96 household labor. An account of a commune in Ronan province observed that: It had long been a tradition for women in China's cotton-growing areas to spend their spare time spinning yarn on home-made wheels, and then weaving cloth zo their own taste. The wsaving, on a wooden loom, is not so hard. A ski*lled housewife could turn out 10 to 20 feet of cloth a day. But it took four or five days to- spin the yarn needed for a day's weaving. The spinning mill has been built by the commune to take this burden off the women (Chu Li and Tien Chieh-yun 1974, pp. 86-7). In this case, mechanization reduces the direct labor input into home weaving boy 80%. Irrigation is another major task which has been transformed by electri- fication. Delivery of water to the fields by electric or diesel pumps is now standard practice throughout large areas of rural China. The impact of mechanized pumping may be seen by comparing the capacities of modern and traditional methods of moving water: King (n.d., p. 263) shows a wooden chain pump of a type commonly used in pre-war China. When lifting water a distance of three feet, two men can cover 2 mou of land (1/3 acre) with 3 inches of water in two hours - i.e. 4 mou per eight-hour man-day. Iproved manual water wheels developed during the 1960s allowed six men to haul 25-30 tons of water from a well. This equipment, with which "working efficiency was. . .raised more than twofold," allowed si:x men to water 8-10 mou per day, i.e. about 1.5 mou or 1/4 acre per man-day (JPRS 42495 (1965), p. 7). Data from several regions indicate that an average of 30-40 mou of land (or 5-7 acres) can be irrigated by one horsepower of machinery (see JPRS 15657 (1962), p. 21; 16268 (1962), p. 49; 22306 (1963), p. 72 for examples from Chekiang, Rupei and Kiangsu provinces). A 3.5 hp lift pump can raise sufficient water to a height of 100 meters to izigate 100 mou of land (16 acres). A 7 hn lift pump can irrigate 200 =ou of land situated 200 =eters above wacar level (I?RS '2481 (1967), p. 8). chaziZed ~i*_4,,--!-4on d_oes =uch more tha-. 3_1.' 7--olace labor. Yiell-miza puzos per`o=m :asks th-at =a -L `4culz- o: ~zcseZr ua ,.r ani=a_1.labcr. ?lots located --:r a-cve or far away r`ZCM aa-:Ja:er source:s 97 can now be watered; deep underground water sources can, now be tapped. The land can be rapidly irrigated or drainri with pumPs which operate 24 hours a day. As a result, mechanization creates a potential not only for raising output within the traditional cropping pattern, but also for added increases resulting from introduction of modified cropping systems which use greater quantities of resources but promise a higher output in return. Mechanized threshing, which is now common in at least some parts of China, illustrates how machinery can create opportunities for intensified farming cycles. Electric threshing machines come in various sizes: large models can remove 50 kg of grain per minute, while smaller units can handle 1200 kg of wheat per hour (RSSI notes). These machines require two to three workers to feed in the sheaves and remove stalks and grain; further labor is needed to winnow the grain (sometimes aided by electric fans to blow the chaff away). Although this appears to be a labor intensive process, it consumes less labor, and is also less taxing than traditional methods of threshing. Reducing the length and intensity of peak season labor requirements clearly creates opportunities for incensification of farming. Wheat threshing is also accomplished using stone rollers pulled by tractors. One report states that one craccor can perform the work of 24 draft animals, each of which consumes 150-300 kg of food grains per year along with quantities of fodder (JPRS 21361 (1963), pp. 1, 6). This eNample shows that machinery can save land by freeing arable land from fodder crops as well as labor ( here in the form of animal tending). k variet7 of ocher machines are now used co process rovs. Hsi-ang coun:y (Shansi provin e) reports that a corn shucking nachine -an orocess 50,000 kg a day, whereas a scr=ng worker can nrocess :nly 250 kg by hanC 98 (Xja& Ta-chai ching-shen 1974, p. 25). A cotton gin tested near Peking enabled 3 men to process 6 kg. per hour, or assuming an 8 hour day, 16 kg. per man-day, as opposed to 2-3 kg. for manual Labor (JPRS 44251 (1968), 'p. 29). Other crop processing machines used in rural China include fodder choppers, sugar cane defoliators, winnowing machines, and small numbers of combine harvesters. Transport is another area in which machines have influenced rural eployment oatterns. Rural transport has been affected by the growth of national networks of rail, water and highway transport and by the ex1pansion of bicycle production, but the greatest impact has come from the growing substitution of tractors and power tillers for poles and man- and animal- drawn carts. Power tillers are manufactured in most provinces, and cost approximately 2,000 yuan. They are powered by 7-12 hp. diesels which are usually made in the same province as the tractor. One producer reported that when hitched to a trailer, a 12 hp. power tiller could haul one ton of cargo at a speed of 15 kilometers per hour (RSSI notes). The increasing use of these vehicles releases labor for other tasks. The potential number of workers involved may be seen from a 1957 esti-ate of 10 million workers, or 4.6% of the agricultural labor force, engaged in tradi- tional transport work (Liu and Yeh 1965, p. 69). Tractors and power tillers are also used in land preparation. Machine plowing not only saves labor, buc may also i=rove the quality of Plowing in terms of de:th and of timing. The overall imnact of these machines is illuszraced by :he expqerience of one uniz -n Shansi provinca: The :ower :ilr. . is a mulci-purpose zachine. ach uni: is used 345 days Der 7ear to DIow 500 mcu Of 1and, :ransPcr: 550 99 tons of grain, 3500 tons of organic fertilizer, 50 tons of tax grain, 625 tons of ashes, 20 tons of threshed grain, deliver 100 tons of chemical fertilizer and cement, haul 500 tons of coal for the commune members, 390 tons of straw, also to fight drought by pumping 40,000 cu. meters of water and to haul 100,000 cu. meters of rock. (Yung Ta-chai ching- shen 1974, p. 56). China appears to be on the verge of major efforts to mechanize some basic field operations, principally rice transplanting. Mechanical trans- planters are manufactured and used in the suburban regions surrounding Shanghai and Peking (RSSI noces) and in other regions as well. At 'Ha-lu Comune (Chia-ting county, Shanghai), experimentation has shown that with special paddy preparation, mechanical transplanting of rice can save labor without reducing yields (RSSI notes). In Liu-chi Commune (Hsin-chou county, Eupri), machine transplanting has reduced labor requirements in transplancing from the previous level of 16-17 labor days per mou for single crop rice to the present level of 11-12 man-days per mcu for transplanting two crops (Liu-chi kung-she 1976, p. 20). Experiments conducted in several regions during 1959 indicated that transplanting machines could increase labor productivity in this task by a factor of five to seven (J? March 5, 1960, cited in Amano 1962, pp. 462-63); one commune near Shanghai now reports a 1--fold rise in labor productivity after transplanting is mechanized (Schran 1976, p. 14). The number of transplanters in use rose from 31,100 in 1966 to 277,000 in 1973 (Kuo 1976, p. 224). The effect of mechanization of human and animal labor requirements is illustrated by the results of a 1959 investigation shown in Table 4.L . Anocher view of the i=aac- of electrification and =echanizacion can be seen :om -able -.5, which describes the ct o` ;ari*us :pes of =acinery ct :he suZMLy and zn the oaential demand for farm labor. 100 Table 4.4 Agricultural Labor Perfor=ance Using Various Techniques, 1959 Activity Traditional IMproved Mechanical Implements Implements Implements Plowing 1 man, 2 animals, 1 man, 2 animals, 2 men, 1 35 hp. t7 3 mou per day 10 mou per day tor, 70 mou per Seeding 1 man, 1 animal, 2 men, 3 animals, 2 men, 1 24 hm. t=a 12 mcu per day 50 mou per day tor, 240 mou Per Irrigation 1 man drawing from 1 man using 5 h.p. gazoline pu= a well using bucket water wheel 570 tens per day 5 tons per day 10 tons per day Harvesting Manual, 1 man 1 man, 1 animal, 4 men, 1 40 hp. trac 2 mou per day 60 mou per day 330 mou per day Threshing Stone rollers animal-powered large 22 h-p. threshe 1 man, 1 animal, thresher 14 men, 20,000 kg/da 750 kg. per day 6 men, I animal, 2500 kg per day Source: JMJ?, Nov. 17, 1959, cited.in Yamamoto (1965, p. 153). 101 Table 1+..5 Impact of Machizery on Rural Labor Conditions Impact on Impact on Type of Maciner7 Labor Supply Labor Demand Tear-rouad Peak I=med±ace Potential with ?armi ng intensified Season cr5aing system Food processing Spinning . ++ Pumps + + ++ Threshers * Tractors & power tillers Transplanters Note: +-i denotes primax7 effect of innovation; + deotes secondary effect. 102 These data demonstrate the labor-saving nature of electrification and mechanization in China's rural economy. But what of the economic effect of these changes? Mechanical operations are often expensive in relation to manual labor: in one Chekiang unit, bills for fuel, repairs, and other costs of mechanical pumping amounted to one-quarter of annual costs of agricultural production (JPRS 15657 (1962), p. 21). The purchase price alone for a power tiller is equiva:ent to the earnings of 6-7 man-years of farm labor; larger tractors cost up to can times as much as power tillers. High costs mean that mechanization will not be profitable unless it results in higher output. The highly developed character of Chinese agricul- tural systems makes it difficult to achieve substantial increases in output merely by substituting machines for manpower. Unless the labor released by mechanization is occupied in tasks which directly or indirectly contribute to further intensification of the cropping cycle or create new types of income-earning opportunities, mechanization is likely to increase both costs and unemployment. This can also be seen from Table 4.5, which shows that while available Labor supply is increased by all types of machinery, only mechanical irrigation creates imediate increases in labor demand. This is because improved water supply stimulates the growth of both crops and weeds, thus raising the labor requirements for weeding, cultivating, harvesting, threshing, food processing and storage operations. Other types of mechanization, however, appear to displace labor without creacing immediace demands for labor. We therefore conclude :hat in an economy already troub ad by -nvolunar7- seasonal id>eness, inrduction of arge cuanzities of achinery izc a statc frming s-stcm might well o nc s harm :han good. la _ac:. Chia's 103 supcess in absorbing both labor and machinerj into her rural economy is the result of major shifts in rural production patterns. These shifts, and their impact on labor requirements, are discussed in the following sections. D. Intensification of cropping practices Intensification of cropping practices refers to an increase in the resources applied to each unit of farmland In the absence of changes in the type of crops grown or in the rotation cycle. Chinese publications and visitor accounts indicate that considerable labor has been absorbed by this type of intensification. Land premaration.-- Chinese sources advocate deeper plowing than was traditionally practised as a means of increasing crop yields. Although deep ploring is often associated with mechanization, there has probably been some increase in human and animal labor devoted to plowing each unit of land which is not plowed by tractors. The major increase in labor devoted to land preparation, however, has come in the sphere of organic fertilizers. Organic fertilizers, which include human and animal manure, plant wastes, ash, silt-bearing mud and other materials, are applied in large quantity to arable lands throughout China. Two American groups touring China in 1975 and 1976, for exam.le, visited a number of communes at which a minm of 50 and a maxim o 225 metric tons of organic fertilizers were applied annually to each hectare of 4 cultivated land (i.e. 4-22.5 kg. per square -ater; RSSI, Table 8.3; Wheat Studies 1976, p. 249). Numerous other reporzs could be cited from visitor accounts or Chinese sources. Table .6 oraseencs qians' esci at-s )f che rcwt o` m: ur:ncs sup .ec by rgani-c ezilizars dug 1957-:71. .szina ed r u ain- supp lies 7ose CS 104- Table 4,6 Wiens' Estimate of Fertilizer Supply By Source, 1957-1971 (N,utr:ient, mM') Nutrient Source 1957 1962 1965 1971 Large Animala 4.920 4.209 4.564 5.453 SogS 3.150 3.008 4,632 6.768 Nightsoil 1.860 2.230 2,340 2.605 Green manure .274 (.440) .584 (.584) Bean cakes .525 (.436) .390 (.390) Other noc-chemical 1.647 1.647. 1.647 1.647 Chemicaj .384 .836 2.095 4.347 Total nutrient 12.760 12.806 16.252 21.794 Kg./Ha. Cultivated 114,0 114.6 152.3 194.9 Of Which: Crgazic 110.6 107.2 132.7 156.1 Chemical 3.4 7.4 19.6 38.8 Total NTitrogen/na. cultivated (kgs.). 51.1 53.5 69.8 92.8 ) interpolated or aesumed constant in original source. Source: taken or calcalated from Wieäa (1977, Table 11-18). 105 40%, with the entire increase coming during the decade 1962-71. China's hog population, which rose from 83.5 million in 1957 to an estimated 230.9 million in 1971 and 244.4 million in 1975 (1970s esti=aces provided by Prof. Antony Tang and Thomas Gottschang), provided much of the increased nutrient. Indeed, following a decline in the hog population caused by poor barvests and early comune mismanagement, Wiens' data show that growth of the hog population contributed more nutrients to China's farmlands than the rapidly expanding supply of chemical fertilizers during 1962-71. Taken together, all the organic nutria- sources noted in Table 4.6 conc=ibuted 56.27. of increased nutrients during 1957-71, and 60.9% during the shorter period 1962-71. Despite the growing share of chemical products in the fertilizer total, organic manures are of continuing imortance in maintaining soil structure. Widespread nitrogen deficiency in China's rice 4 regions shows the need to exploit all available sources Df nutrients. In the present context, the most significant characteristic of organic fertilizer is the enormous labor input associated with its collection, preparation and application. One pig produces an average of 1,642 kg. of excraa annually (Peking Agriculture Bureau 1975, p. 101). Nitrogen retention is substantially increased by mixing the excreta with dirt from the floor of the pigsty (I Ts'ai and Wang P'i-chang, 1965, p. 30). I and Wang describe comosting in 1ai-ch'eng county, Liaoning, where the peasants accumulate 17,500-20,000 kg. of manure (excreta plus earth) per pig per year. This process requires the fllowing amounts of labor: 1o6 Man-days Animal-days Earth transvort 2.5-3.5 5-7 Dum ing eartft into pic 1.2-1.5 Paving pit with grass 1-2 Gettirig manure ouc ot pit 1.5-3.5 Pulverizing manure 3-3.2 Manure transport 6.5-7.5 6.5-7.5 Manuring fields 1.5-2.5 Annual total for preparing and applying manure 18.2-23.7 11.5-14.5 from one pig I and Wang ar-ue that although this process ensures a high rate of nitrogen retention, "it causes excessive expenditures of labor and animal power." They suggest that annual manure accumulation be reduced to 10,000 kg. per pig by using less earth (1965, pp. 30-31). Assuming that this reduction in manure accumulation would proportionately reduce labor requirements, one might expect the labor requirement per pig to decline from approximately 21 man-days and 13 animal-days to about 10/18.5 or 53% of the Hai-ch'eng figure,about 11 man-days and 7 animal-days per pig. Large animals (horses, mules, donkeys, cows, buffalo, oxen) produce more excreta per camita than hogs. An average of data for horses and oxen gives an annual total of 9,125 kg. per head, or 5.6 times the output of one hog. If one assumes similar labor input per ton of excreta rQr pigs and large animals, labor requirements for composting pig and large animal manure in 1957 and 1975 may be calculated as follows (animal population fom unpuolished estimates comoiled by Prof. Anthony Tang and Thomas Gottzchang): Esti=. ` animals, Yill4on man-days 4illior animal-days 7ear-end -illions 1957 1975 1957 1975 1957 1975 cgs 1-5.39 2L2..3 1605 1689 -0ZI L---- 33 .-6 10 3 ,2 i 331 107 At 300 man-days per year, the human labor alone required to compost and process the manure of these two categories of animals is cquivalent to 3.6 million man-years (for hogs) and 4.1 million man-years (for large animals) or a combined total of 7.7 million man-years. This amounts to one-tenth of the rough total of 78-.8 million workers entering China's agricultural labor force during 1957-75. Much less is known about the growth of quantities applied, and hence of labor power absorbed in the preparation of other types of organic fertilizers. Application of human nightsoil is closely related to population growth, while application of green manures and bean cakes depends on cultivation of green manure crops and soybeans respectively. One might speculate that the category of "other non-chemical," which includes mud from the bottoms of canals, stream-beds, reservoirs, fish-ponds, lakes and rivers; ash, leaves, weeds and plant refuse not used as animal feed, and manure from chickens, ducks, rabbits and other domestic animals, has not remained constant, as shou in Table 4.6, but has increased along with such variables as the number of dams, fish ponds, trees and irrigation canals, household coal consimtion, overall output of plant products etc. In any case, there can be no doubt that collection, =icing, storage (usually in covered underground pits), transport and application of various types of organic fertilizers accounts for a significant portion of the increased labor input into China's farm economy. Some Chinese sources 7evort chat the accumulation and application of organic far izer is liziled by :he cpoortuni:7 cst of :he recuired labor: 74y g -zertlizers ayers and giving --e fil a M rat- numoer od dressi-gs accordi-g :0 :he dissimi-ar ZeeCs o 108 agricultural crops. . .at different periods of growth definitely can yield good results technically. But applying fertilizers in layers and giving the field a greater aumc of dressings will snend more labor. This calls for the weighing of the advantages and disadvantages through comparing and analyzing the economic results before we can make a final decision (Yen Jui-chen 1964, p. 24 with italics added). The significance of organic fertilizers in rural China's labor economy may be seen.from Yen Jui-chen's statement that under the present condition of having to supply an abundance of organic fertilizer, the amount of manpower and animal power spent in the accumulation, transportation and application of manure generally takes up between 30 and 40 percent of the total amount of manpower and animal power expended in the whole year (1964, p. 24; Fei-ch'ing nien-oao 1967, p. 1383 gives a figure of 40% for the 1950s). Plantinz and transvlantine. -- Chinese farm sDecialists have advocaced "close planting" - or raising the density of plants in the fields, since the early 1950s. Support for this labor-absorbing method has been eroded, however, by the memory of irrational implementation and consequent harvest reductions during the Great Leap years of 1958-60 (Kuo 1976, Chapter 13). Since then, Chinese sources have promoted "rational close planting." Close planting appears to have achieved its best results in raising cotton yields. "Ch'i-li-ying Commune (1sin-'asiang county, 'onan), after years of testing and popularization, has raised the density of its cotton plants from 2,000 to 7,000 and even 8,000 per mu" (Chu Li and Tien Chieh-yun 1974, p. 40). In Hsinchou county, Rupei, cotton was planted at a rate of 3,000-4,000 plants per mow (1/6 acre) in the mid-1960s (Ch'eng Chin-chiah 1963, p ) The contribucion of close pIanting to =uzuz 3rowth and labor absorpoion ozher ---es of zropping is noc l . rize growiz ser plan-ag raises yields only if accompanied by increased fertilizer aDDUication (I and Wang 1965, pp. 29-30). T-n vegetable culture, Aerican specialists have suggested that close planting may result in stunted produce (Plant Studies 1975, p. 87). Transplanting of rice shoots from seed beds into the main Efield is a well-know-n feature of traditional Chinese agriculture. This procedure economi.zes on land and reduces the growing period in the Main field, thus allowing an increase in the index of multiple cropping (sow-n area/cultivated area) within a fi:ced growing season. The highly labor-intensive practice of transplantinag young shoots from seed beds into the fields has been adopted fvr a growing- range of crops. Tn addition to rice, which is "universally transplanted" (Sprague 1975, p. 552) and vegetables (ibid.; Plant Studies 1975, p. 86), for which transplanting was co- n prior to 1949,'mention of trans-planting is now made for wheat, corn, cotton, soybeans, rape and "such fiber crops as hemp , Jute and abutiIon avicennae" (-T?'S 42524 (1967), p. 12 ; WTheat Studies 1976, p. 31; J71R. 4,0014 (1967), p. 9). CroD manazemnent. -- The Am uunc ofz labor devoted to each crop-acre is considerably higher now than in= the mast. Buck (1937, p. 302) gives the following average ht-an labor in-puts per crop-hectaZe -for various crops covered by surveYs fr12-3 NatI. average Average ni-or ragion showing hi ghest labor izipucs ize 202.5 38 Va e a r 3-5 110 The American Wheat Studies Delegation, which visited China in 1976, was told that the cultivation of "high yield plots" of wheat required 225-450 days of work per sown hectare in the communes visited, the most frequent reference being to 300 days per hectare. Similar estimates were given for corn, rice and cotton. The greater and more uniform effort per unit of cropped land appears to be attributable to the fact that all land -- not only rice land -- is being irrigated, that the same kind of heavy fertilizing is practised on all crops, and that deep plowing and other forms of more intensive cultivation are used as a rule. The workdays per sown hectare reached 450 in teo instances. . . where corn and wheat were being transplanted by hand! And they stayed -- or had fallen below -- 150 in one case. . .where part of the work had been mechanized (Wheat Studies 1976, pp. 170-71). This information, which comes from a saple of advanced farming regions, indicates that abundant supplies of organic and chemical fertilizers and water have created labor requirements (exclusive of composting) amounting to roughly five times the are-war national average for each unit of land sown to wheat and corn, 2.3 times the prewar national average for cotton, and 1.5 times the prewar national average for rice (based on 300 -an-days per sown hectare). - These labor requirements do not take into accdunt any increase in the index of multiple cropping (discussed in section E. below). If the figure of 300 man-days per sown hectare for high-yield fields of irrigated corn, wheat, rice and coton is compared not with national averages, but with regions of peak prewar labor input for each crop, it is clear chat the labor requirements of intensive cultivation in the 1970s far outstrip even these higher figures for every crop except rice. To what tasks is this extra labor assigned? In the case of coton, Chinese reports allow us to answer this question with some orecision. Table ".7 zcoares uni abor requirements derived from 3uck's naSionwide surve's o _he 930s wich reporrs from :hree units in ;u-kung zoumc-, Shensi fr - . -tese zc=p -isons show :ha: the iz t d Iabor applied :o ::con in :h-e uirtined Table &,.7 Labor Recui.rements for Cotton, 1930s and 1960s (,Man-day ) per mou Sur7ey data, 1929-33 Wu-kung, Shemsi, 1962 - three units A 3 C Total 8.8 Total 40-28 35.90 34.57 Plowig 0.4 Land Preparatio 0.84 1.33 3.75 Digging 0.2 Earrowig 0.2 plaatizg 0.4 Plaztimg 0.13 0.11 0.57 Cultivating 2.3 Cultivating, 10.75 11.25 8.75 pruaimg Fertilizing 0.6 Transport &250 apply fertilizer Plant protection 1.88 1.25 1. 40 Harvesting 3.0 Ear-estizg 13.37 11.87 13.00 Total direct Total direct 28.85 27,81 29.97 labor lab5 7 Total I2direct 1.7 Total indirect .. 43 8.09 4.60 labor labor Carying 1.1 ThreskLimg 0.1 Storage 0.1 Dryizg 0.3 Piliag 0.1 Other 0.2 Sources: 1929-33 data from Buck (1937, pp. 302-4); sub-totals maT not check due to rounding. 1962 data from Wu Yung-haianag (1963, p. 33) 1.12 Wu-kung fields goes primarily to three areas: cultivating and pruning, harvesting and ;ndirec: labor (probably composcing). Chinese descriptions of cotton cultivation indicate an incensely labor- using system in which each plant receives individual attention: during the budding period of cotton, the best result is observed wbn the fertilizer is applied directly near the root (JPRS 43415 (1967), p. 42). a usual process was to pluck the tips of cotton plants. A new method has been used since 1961. . .the tips are pinched slightly (JRS 43073 (1967), p. 18). To control growth during the crucial budding period, farers in one area rely on "constant" plowing and loosening of the soil and timely cutting of leaves and branches (JPRS 43410 (1967), p. 32). Similar care is exercised at the final stages of plant growth. An agricultural journal warns that at the final stage of cotton cultivation, it is important to exterminate insect pests, prune the cotton plants properly, and carry out weeding work just as carefully as at the early stage (JPRS3 "050 (1968), p. 1). :iaresting of cotton also appears to be done on a plant-by-plant basis. Chinese sources emphasize the delicacy of the task (JPRS 43377 (1967), p. 34), and visitors report that cotton fields "are picked frequently and few oen balls are visible at any one time" (Plant Studies 1975, p. 108). Occasional references indicate that similarly labor-using mechods are applied to other crops as well: it is iportanc zo clean tie peanuc planc ac the time of s"roucing (J~?S 62"95 (1967), p. 9). increase the Droduccion of broad beans bV cuzZng :i)s and main stems (J?RS 1527 (1968), ?. 26). 113 Research in the northeast confIrms results obtained elsewhere that a concentration of nitrogen fertilizers near the root zone of the rice plant gave a greater efficiency of utilization than broadcast applications (Plant Studies 1975, p. 46). Corn. . . .planting is done by hand. Weed control is alaost exclusively done by hand hoeing. Herbicides are used to only a limited extent because of problems posed by both interplanting and crop sequences (Plant Studies 1975, p. 65). In the vegetable growing area around Shanghai. . .hand watering of individual plants hel;s assure success of the transplanted cron (Plant Scudies 1975, p. 116). Plant orotection is another task which absorbs considerable labor power: One of the biggest plant protection resources is their huge human labor force. . . .Some L500 people in one co=une visited are involved in plant protection work. Of these, 685 raise and herd some 220,000 ducks - a traditional method of controlling paddy insects. . .The country has the manpower to grow and deploy wasps, fungi, bacteria and other b.iologic4l control agents] by methods economically unfasible here. .24asses of 300,000 wasps per acre are released. . . (Reynolds 1976, p. 30). Biological methods were used to control plant diseases and insect pests on 3.47 million hectares of land during 1976 ( Review 30 (1977), p. 31). Growing use of chemical technology also requires a substantial labor input. Raynolds (1976, p. 30) reports that in the field of insecticides, the Chinese have moved away from DDT, which bred resistance among carget species, toward "narrower spectrum, less oersistanz organophosphorus insecticides," which require repeated applications. Chinese sources also emhasize the desirabilicy of multiple applications of chemical fertilizers, particularly for sandy soils which do not retain unused nutrients (e.g. I and Wang 1965, pp. 27-8; J?RS 1050 (1968), p. 1; ,Z_527 (1968), . 3, and 13679 (1967), p. "). The aterials presented in this secticn lead to the conclusion cHa: intensification of cropping practices -- an increas in resources appl-ed ?er crop-acre of oarricular ::cos in the absence of changes in nulti-cropping i14 or croppingpatrarns -- has absorbed large amounts of Labor during the past two decades. The largest sources of labor demand within this category appear to have come from increased application of organic fertilizers and from large increases in per-acre labor requirements for transplanting and cultivatin cotron, wheat, maize, other northern grai.n crops, and to a lesser extent, rice. E. Intensification of the cropping cycle Intensification of the cropping cycle refers to an increase in the number of crops har7ested oer unit of culcivared land resulcing from muti-cropping and intercropping. Multiple cropping and intercropping have long histories in China. Buck (1937, p. 274) found that the overall index of ultiplp cropping (so%n area/ cultivazed area) for China had reached 1.49 during 1929-33; for regions in which double cropping of rice was the a a aring system, the index was as high as 1.76. During 1952-37, the index of multiple cropping rose from 130.9 to 140.6 (Kuo 1976, p. 174). Raising the index of multiple cropping can provide major increases in the demand for far labor. In rice-growing areas, for examle, a shift from one ta rwo crops will increase labor requiremencs 'V 60-70% ("'u-ch'L Cao- t'ien" 1964, p. 27). Furzher extension of multiple cropping is feasible in zany areas of China. Expansion of multiple cropping is limited by clinare and also by the supply of labor, water, fertilizer and ocher far inputs. One way of raising the racio of sown cz culzi;atad acreage is co develop plant varieties which either macure in a shorter ctme or are :ore resiscant to extreme weacher conditions than existing ;arieties. 7= China, reors of this type are difficult because of the a3read-7 inensive cr=ping system developed over :he centuries. New varieties of rice developed at zhe 115 International Rice Research Institute are unsuited to many parts of China because their growing period is too long to fit into existing patterns :f double and criple cropping (2lant Studies 1975, p. 45). A brie review of the secondary literature (?1ant Studies 1975; Kuo 1976; Stavis 1974) suggests that Chinese seed development efforts over the past 20 years have emphasized the creation of varieties which provide high yields while resisting common plant diseases, rather than development of fast growing plant types. I therefore hypothesize that seed development has contributed only slightly to the ezpansion of multiple crooping. Industrial products have, however, contributed to extending the growing season in some regions. In Kwangtung, plastic sheets protect early rice seedlings from cold and da= February weather, thus reducing the probability of seedling loss, raising the expected yield from early seeding and hence enhancing the possibility of a formerly risky extra crop (J?RS 43698 (1967), p. 33). The major impetus to expansion of multi-cropping since 1957 has come from changes which eliminate bottlenecks arising from seasonal shortages of farm Lizucs, notably human and ani=al labor power. 81% of the 260 localities surveyed by Buck reported seasonal labor shortages during 1929-33; these occurred most often during the harvest season (1937, p. 301). The following report Jrom Esin-chou county, Eupei, illustrates the problms encountered by localities attempting to iatensify the cropping cycle: This olace ha=vests a cotzon crov and a wheat crop each 7ear. However, frm planzing to harvescing, wheaz and :otton neec a total of L28 days. . . chis is the princi4al concradiction o' :te 7"o-crop system.. . .7C Cs oncenraZc ralec:ion in tHe =qo periods oz "four fasts" and "three kinds of aurumn work" during the su=er har-esz. 116 First, the "four fasts" period Lfast in harvesting wheat, destroying the stubble, controlling insect pests and dressing land lasts only about ten days, but there are 11 kinds of work to be done at the same time. The amount of work involved is huge, and there is a time limit. Next, the period for "three kinds of autum work" Laucun harvesting, plowingand planting] also lasts only about ten days. It is necessary to harvest cotton as well as to plant wheat. :f the removal of cotton plants is postponed in order to insure the cotton harvest, wheat cannot be sawn in good time. 11 the cotton plants are removed earlier, cotton yield must suffer. This is the second hurdle which must be negotiated in order to insure the two-crop system. (Ch'eng Chin-chieh 1965, p. 3). If farmers attept to comlete a rotation cycle for which resources cannot meet peak demands, yields will fall. In Yuan-chiang county, iunan, a region in which double cropping of rice requires that I man-days of labor be devoted to each mou within a period of 15-16 days during July and August, reducing the area of two crop rice from 70% to 57. of the paddy field area raised average yields. Observers concluded that "Under present conditions of labor supply and reliance on manual labor, it makes sense for the lake district to allocate about 507, of paddy land to double cropping" ("Hu-ch'd tao-t'ien" 1964, p. 28). Under these conditions, machines capable of repLacing labor forerly devoted to irrigation, harvesting, thrashing, trans-ortation, plowing and transplanting during seasonal periods of peak labor demand can eliminate bottlenecks limiting the sDread of ulti-cropping. In the Eupei examla cescribed above, nachinery ?erfo=ed casks equiv-alen: to 61 work-days for eaGh of one comune's 2205 workers. Use of :hreshing machines and power tillrs ensured cimely ?rocessing of the wheat harvest Snd soWing of :He coccon Cop. in the same uni:, the "two- way rush" Crushing through harves ting and plantingj has for years been the critical period of Ci=e in which cotton and rice fight for Labor power, fartilizer and water supply. But in 1964, because nachines were used to lift wazer, abundant labor power was 3aved. The pressure of the "two-way rush" on paddy fields was reduced, and there were special shifts resDonsible for Eighinrg the drought and gUarding againsc - insect pests in cotton fields (Ch'ang Chin-chiah 1965, p. 4). Mechanization allowed unprecedented harvest results in this locale. These anecdotas illustrata how =echanization imnroves results from exiszing cropping systems and creatas opportunities to add new crops to the annual cycle without breaching the newly enlar-ed peak supplies of human, animal and machine ocwer. The extent to which mechanization has encouraged the spread of multiple cropping is not easy to determine. Some qualitative reports suggest a considerable increase. The Ilant Studies group was inforned Chac since 1965, "t.he practice of growing only one crop of rice was changed in ne central and northern part of Caina as follows: - Up to 290 N latitude: double.cropping of rice. - North of the Yellow River: ona crop of wheat followed by ona of rice (iportant system of north China). - Ln the Yangtza River basin: one crop of rice, one of alternate cro on unirrigated land; Cwo crops of rice where iraced" (7lanc Studies 1975, pp. 114-15). Northward extension of Lwo crop rice to 290 latitude from the tervitory shown in Buck (1937, p. 27) adds large portions of ukien, Chek ,l and Runan, orvinces whizh accouncad for a combined cotal of 9.3% of 1957 culc:i7ated area (Wiens 1977, Tabla IIA-1), to :he o cro rica jrZa. :wever since znese areas already showed high nulti-fropping figures in the 1930s (.69 for the ricec region: Buck 1937, p. 27), rice frequently ralaces 113 a previously cultivated second crop. The resulting increase in the index of multiple cropping is probably small; however the shift in rotation from winter wheat-rice to tvo crops of rice may increase both yields and Labor requirements. Introduction of a wheat-rice rotation in areas north of the Yellow River does indicate a rise in the index of multiple cropping. These areas, including Bopei and Shansi provinces, which accounted for 12.1% of 1957.cultivaced area (Wiens 1977, Table IIA-l), as well as parts of Shantung, :onan and laner Mangolia, are part of Buck's winter wheat-kaoliang and winter wheat-millet regions which had relatively low multi-cropPing indices of 1.39 and 1.18 during the 1930s (3uck 1937, pp. 27, 274). This change, if widespread, and especially iF major parts of the three northeastern provinces are included, does indicate a distinct upward shift in the national -multi-cropping index. The changes in the Yangtze Basin area again refer for the most part to changes in cropping patterns rather than to increases in the number of crops grown each year. Reports of attepts co develop triDle cropping in riverine areas of Kiangsu and Kwangtng provinces (e.g. Planr Studies 1975, p. LO8) are limited to small areas and do act affect the national index. The conclusion of this discussion is that one might expect a marked increase in the national index of multi-cropping arising primarily frcm a shift to double-cropning in Hcnei, Shantung, Shansi, Honan and :ossiblV LiaOning province. Turning to statistical measures, preliminary esciates comiled by Prof. Anthony Tang and Thomas Gcazchang indie :He Z-ollowing changes in national 2ulzi-c-=-ping indicators: 119 1957 1975 X increase ultiple cropping index (sown area/cultivated area) 1.406 1.549 10.2% ,1odified multivle croping index 1.203 1.274 5.9% Without more provincial data than are presently available, it is hard to judge how well the Tang-Gottachang estimates coincide with qualitative reports. However since data problems oblige Tang and Gottschang to assume that the area sown to non-grain crops remained constant during 1966-72, one might speculate that their index could understate the growth of multiple cropping since, as will be shown below, grain output has lagged behind overall agricultural performance. Intercrooping, or simultaneous cultivation of more than one crop in the same field, is comon in certain regions. The Plant Studies group observed interlanting of vegetables, fruit trees in all regions and of various grain combinations in Kirin and aarts of Shensi province (Plant Studies 1975, pp. 85, 115-16; see also Wheat Studies 1976, pp. 29a ff). Eowever the extent to which this is a modification of traditional practice is uncertain, as is the Creatment of intelanting in estimates of multiple cropping indices by either Chinese or 1oreign researchers. However it is worth aoting that inte-planting raises requirements for both direct and (via fertilizer, water etc.) indiect labor input into the growing process. The iact of i=tensified cropping patzerns on labor requiremencs can be seen from -he following data and estimates (0hear Studes 1976 pp. 171-3): Commune Multiple Cropping Annual Labor 2Cuiremenc ( Index ?ercult. ?er Regiona, 1970s Leczare ,orker* Chiang-aing ,Kiangsu) 1.65 2.2 990 300-320 Ma-lu (Shanghai) 1.65 2.6 1l70 300-320 120 Comune Multiple Cropping Index Annual Labor Requirements (d Ragional 1970s Per cult. Per workar* hectare Sino-Albanian (Peking) 1.18-1.39 1.6-1.85 720-830 300-320 Shuang-ch'iao (Peking) 1.18-1.39 1.6-1.85 720-830 300-320 or lass 4 commues near Shih-chia- chuang, E opei 1.18-1.39 1.6-1.85 720-830 170-230 * includes estJ-ated labor in-put for collective faring (including ,ertilizing) and wintertime construction Intansification of farming via an increase in the index of multipla cropping leads to a general risa in farm labor requirements which can generate large increases in epoyment. F. A shift toward labor-using farming activities One way of raising agricultural ~anpower requi:eents is to raise Che share of relatively labor-using activities in the total faring picture. Data presented in Tables L.8 and 4.9 show that the years since 1957 have witnessed a modest but definite trend in this direction. Buck (1937, p. 302) gives the following data for main Labor requizaments (man-days per crop acre) for growing varicus crops during 1929-33: Grain crops: Other crops: Corn 23 Cotten 53 Wheat 26 Sugar cane 68 Kaoliang 35 Tobacco 88 Yil=C 40 Tea 126 Oats 57 Mu1berry 196 Rice 82 (for silk) regard the five non-grain cr-os above as 'abor intensive because :zey raqu:e =ore Iabor oer acre than any grains excEpt paddy riza. Cotton is included because of recen= increases in is labor in:ensity. Other labor in:ensive act:'ivi ins clude raising of hogs and draft animals (because of :he labor required for processing nanure as well as for tanding che , and J.21 Table 4.8 Agricultral autmut Growth, 1957-1974 1957 Post-1957 Gross Value Growth Rate Pertcd Source (Bill. 1952) % yuan Grain 221.81a 2.1 1957/74 Wien= 1977, Ta`ble IC-2l labor Intensive 12.22 3.5c Eogs 3.95b 3.9 1957/74 Wien 1977, Table 11-21 Ve ge tables 3.91b 3.8 1957/70 PerkIna 1975a , p. 154 C0tton· 2.78a 2.5 1957/74 iezs L977, Table 11-21 Large anials 0.57' 0.9· 1957/72 Wie= 1977, Table I-21 Tobacco- ,.45 a 6.4 1957/74 Wie= 1977, Table 11-21 Sugar 0.27a 4.7 1957/74 7-S::: CIA 1976a, p. 3 Silk cccoonis 0.13a 0.9 1957/73 Mienz 1977, Table I1-21 Tea 0.16a 2.7 1957/73 `±s 1977, n. 81 (3 provic Other 2.12 2.2 Soybeana 1.41 a 2.4 1957/74 U.S. CIA 1976c, p. 9 HemD 0.40a • ' 1.0 1957/74 Wiens 1977, Table 11-21 Sheem & Goatz 0.31a 2.8 1957/72 'Wiens 1977, Table 1-21 Total Identiled 37.15 2.64 Unidetified 9.93 Total 1957 output pl.ant & animal 47,08 pr oduc tz aIu and Yeh (1965, Tables EI and E2). Pers (1975a, p. 154) coverted: frem 1957 to 1952 mrice3 using an ine:c der-ied f:rom N.R. Chen (1967, P. 364), A'erage of coemponen-t growtt rates Weighted by 1957 s output a en3 (1977, Table I:-$). 122 Table 4.9 Sectoral Contributions to Agricultural Outmut Growth, 1957-74 (Billion 1957 yuan) Gross Out-ut Value Contribution to Growth, 1957-' 1957 1974 amount s.hare amount share amount share Total 53.700a 100.0 83.076 100.0 29.376 - 100.0 Grain 29.970a 55.8 42.670c 51.4 12.700 43.2 Labr-ten 10873 d 20.2 19514 23.5 8.641 29.4 Other 1.386 -5 2.731c 3.3 .845 2.9 Unidentified 10.971 20.4 18.161 21.9 7.190 24.5 Source: Table 4.8 aperkins (1975a, p. 154). bCalculated by ass-ming 2.6% annual growth duing 1957/74. cBased on component 6rcwth rates derived in Table 4.8. d Converted from 1952 to 1957 prices using an index derived from II.R. Chen (19 67, P. 364). 2123 egetable growing. Table 4.8 contains in4ormation on output growth for various farm products between 1957 and (whenever possible) 1974. These data show clearly a pacterm of differential growth favoring labor-Lntensive products. With the exaception of large animals, for which slow growth arises from the growing availability of t-actors, and silkworm cocoons, each labor-intensive activity has grown more rapidly than -ain output. A rough calculation of 1974 agricultural gross output value in Table 4.9 shows that the marginal contribution of labor-intensive activities to farm output growth is nearly 50% above the 1957 share of these activities in total output, while the marginal contribution of grain is only slightly above 3/4 of its initial 1957 outout share. If data were available for dairying and horticulture, two labor-intensive sectors which appear to have expanded rapidly since 1957 (Chi I-chai 1967, p.. 17 estimates that output of powdered milk grew at 12.3% per year during 1957-66), the pattern of accelerated growth in labor-using activities might be stronger than shown in Tables '".8 and 4.9. Strong per-orance of labor-intensive crops explains why the present estimate of 1974 gross value of agricultural outzut is higher than Ferkins' estimates shown below (all in terms of billion 1957 yuan): Perkins (1975a, 1975b) Wiens (1977) Fresent Study 1957 53.700 53.7 53.700 1964 51.500 1965 58.960 1974 77.700 79.9 33.076 1975 81. a CA 1975a, p. 1 indizates 1.- decline for 1974-75 124~ Since the 1964-74 increase of 51% is based on an official report by then-?7emier Chou En-lai, the need for some upward revision of Perkins' 1974 figure can be seen from the implication that output growth during 196Z-65, a year of no aDDarent growth in grain output, reached the impossibly high rate of 14.4%. Raising the 1974 total to 83.076 billion yuan lowers the 1964-65 increase to 7.2%. This is still excessive, suggesting that either Perkins' 1965 figure is too high or the present 1974 figure is too low. Further increases in Labor requirements may have occurred as a result of shifts in the composition of grain output. Since "the manual labor required for working in paddy fields is 2-3 times that for wheat or corn" (JTPRS 21971 (1963), p. 37), the northward spread of rice cultivation may have raised the average level of labor requirements per unit of acreage sown to food grains. G. Rural construction Annual campaigns to complete water conservancy and land improvement projects during -the winter months have become a regular feature of Chinese rural life, and one which has absorbed vast amounts of manpower during the past 15 years. These campaigns, which encompass major projects coordinated in PekiN- as well as local projects planned and carried out by communes and brigades, cover a wide range of activities including water ecachment, afforestation, irrigation, flood control, hydro-electric stations, tube-wells, and levelling, terracing and reclamation of arable land. In some regions, these programs have achieved dramatic results. In the -ormerly -rain-dezicient northern orovinces of Hopei, ':onan and Shantung, ach winzer-spring season, tens of nilions of opCle braved :he i:ng wind and snow and worked on irrlatin Drojee:s. They? aise and reinzorced ,000 kOs. of d-kas . ..evera. :housand ers anc :z::-ra -we -:ar -,:g azdie . f r a a 2' o ra :a n =.6 c of 'o-ligand from 7:he :h_-_a c`f:od`ng _,nd wazarlzgg--n4. 1.25 the same 't'e the inhabitants went in for water conservancy and other farm improvement projects, concentrating on fighting drought. Reservoirs and terraced fields were built and trees planted on the hilly areas. . to prevent soil erosion. Wells and ditches were dug on che plains and alkali leached from the soil, all of which involved a tremendous amount of work. By 1970, however, the three provinces were in the main self-suf:icien: in grain, while their record outout in 1973 was 2.5 times that of . . . 1949, and an increase of 16,300 million kgs. over 1963 (New China 1975, p. 132). Available data on the overall size and results of these campaigns apoear in Table 4.10. These data show the truly massive scale of China's winter works camaigns, which in recent years have involved 25-30% of the entire rural labor force. With over half of the reported increase in irrigated area attributable to tube wells (Nick=m 1977, p. 28), the bulk of construction work is directed toward i-proved utilization of existing water supplies, toward reducing the vulnerabilitj of crop yields to inadequate or excessive rainfall. The timing of these camaigns coincides with the pattern of seasonal idleness reported by Buck for the years 1929-33. Buck (1937, p. 294) found that rural male workers were idle for an average of 1.7 months annually, with 80% of the idle time coming in the winter months of Nov ember through February (see Table 4.1). n. studying the winter works cazpaigns during 1962-72, Nickum found that this "distribution of idle time corresponds closely to the recent winter-spring water conservancy activities" La which "the average particioant . . .is active for 1' to 2 months during an active campaign." (1974, pp. 172, 293). Tt therefore appears that even prior to the increase in scale suzgesced by the participacion data for 1973-75 shown in Table 4.10, winer works caMaigs have =educed or eli=inated tradizional slack periCds in -he arning calendar of a substantial segment of China's rral populace, parzizular:L in 126 Table 4.10 Water Management Statistics Year Winter Works Campaign Particiants Earth & Stonework Irrigated Area Number of (millions) (Bill. cu. meters) ill. % of powered ha. arable tubewells (thousands) 1930s 26.5 27 1952 21.3 20 1957 34.7 31 1963 8-15 1.0-1.8 1964 15-30 1.4-2.5 33 31 1965 30-40 2.2-3.8 100 1966 40-60 2.5-4,5 1967 40.60 3.0-4.5 1968 30-45 1.0-2.5 1969 50-60 2.0-3.0 1970 60-80 3.0-4.5 1971 90 5.0 600 1972 80-90 4.0-4.5 42.6 40 800-900b 1973 100a 44.0 41 1974 100a 1300 1975 100a 474c c 1700d Note: data for the winter works campaign of 1964/65 appear in the row labeled 196 and similarly for other years. Sources: except as noted, data for winter workL campaizns are estimates from Nickum (1974, pp. 279, 290-1); except as noted, other data are from Perkin (1975b, p. 360). a Annual average for the four campaigns from 1971/2 to 1974/5 retorted in JMJP Oct. 21, 1975. .igure of 900,000 electrically powered wells in North China reported by Scalapino (1972). c Based on average annual increase of 1.6 nillion ha. or 4rrigated land achieved during the cammaigns of 1971/2 to 1974/5 recorted in BEC W881 (1976), A.. Percentage of iigated land is calculated assuming no change Jn total araole land. Nick= (1977 , . 23). . 127 north China. Nicku@ms findings are consistent with Chinese reports that during the mid-1960s, construction consumed about 20% of total rural labor power (1966 claim cited in Nickum 1974, p. 280). The share of winter works in total labor input may have risen during the 1970s. This is suggested both by the participation data in Table 4.10 and by the findings of the American Wheat delegation at advanced communes which had passed beyond the most intensive phase of construction: During the initial construction phase, which seems to have been comleted everywhere in two or three years, the communes invested. . .as much as 40-50% of their entire workdays. Even now, however, when what remains to be done is maintenance and .i=rovement of the facilities, the communes visited reported allocations of 6-30 percent of their workdays to basic construction, che unweighted average being 20 percent (Wheat Studies 1976; p. 169). However, the Wheat Studies group also observed that "much if not most of the arable land of North and Central China has been levelled and is being irrigated as of now" (1976, p. 168), which indicates that whole regions may be working mainly on maintaining and improving, rather than newly construc=ing, wa.:er control facilities. Focus on maintenance and upgrading is not inconsistent with the rising participation shown in Table 4.10. This is because ex:ension of water control and irrigation facilities creates major new labor demands. A rising water supply and, equally iortant, a reduction in its variability, raises yields and permizs intensification of the cropping cycle; we have seen hnow these changes increase the demand for labor. In addition, the i garion system itself absorbs quantities of manpower for =anage=en: and repair work. The exaen- to which available water su4plies ac:ually fulfill he eeds of crons in the fields depends crucially uPon the zonstruct:ion and maieanance 128 of ditches and gates, per.ect levelling of fields and other auxiliary projects. One survey found chat the absence of auxiliary projects could lower the utilization of water supplies by as much as 40% (Nickum 197-1, p. 296). Maintenance of water control facilities necessitates frequent repair work; measures recommended to prevent leakage in irrigation channels, for example, include loosening the dirt of the bottom and side slopes before releasing water, thus using the dirt to seal holes and crevices; tamping the soil with packers; covering the channels with clay; the use of small rocks and pebbles. . .and adding a certain amount of clay to the water to seal the crevices (JPRS 44050 (1968), p. 47). H. Conclusion This chapter has surveyed various labor absorption mechanisms which have operated in China's farm economy during the past two decades. In su=arizing their overall impact on the balance between supply and demand for rural labor, it is important to recognize the interactions among various components of labor demand. The following passage gives some indication of these interrelations: Agricultural development, in the Chinese scheme, begins with water management and land improvement. . . . With the provision of timely and adequate supplies of water, it becomes possible to introduce fertilizer-responsive plant varieties to-echer with the fertilizer needed to achieve high yields for these varieties. Effective water management may also make it possible to increase the cropping index. . .and this increase will in turn require more fertilizer as well (RSSI, Chapter 8). Rural industry can provide the tools and construction materials needed -or water control and land development projects, which in turn st:ulate l-cal demand for puins, :ertilizer, chrashers, a lctrii and other i-d'stra goods. :acreased consumtion of indus:rial products sti=ulates on-induscrial C~ ~ o 0 I 3 ia-=z3 1e _:a: MiLn,7 z Assurad -wa:er- _uies -_aiza :z -e i - J129 labor intensive construction projects such as land-levelling, terracing and construction of feeder ditches; and rising consum tion of chemical fertilizers iproves not only the croP yield, but also the yield and nutrienc content of green manures and plant wastes which provide the raw macerial for organic fertilizers. The dynamic process of rural development stemming from the introduction of collective organization and industrial inputs has enabled China's farm economy to support a growing populacion with no perceptible increase in cultivated acreage. Vigorous reclamation efforts have barely managed to match the steady alienation of arable land for housing, industrial construction, irrigation projects and road-building. The substantial growth of output recorded in Table 4.9 has come entirely from more intensive use of an essentially fixed land base. The main finding of this chapter is that rural labor, as well as rural land, has been utilized with increasing intensity during the course of the past two decades. This conclusion is expressed schematically in Table 4.11, which summarizes the qualitative discussion of the previous pages, and quantitatively in Table 4.12, which presents estimates of the supply and demand for rural labor in 1957 Pnd 1975. In preparing estimatas of labor demand for 1973, I have tried to avoid projecting conditions from advanced units onto national totals. The key assuption here concerms the nimber of -an-days devocad to fertilizing and cultivating each hectare of sown area (Line 1A). in the ,heat Studies report, "he most common observa=ion is 450 man-days per sown Hectare (150 -or 3er:ilizing, 300 for cul:ivacion). This is based on abser7acions -n aorth and cancral China, and aoc in the south, where the multiple croppi- 130 Table 4.11 impact of Recent Develoments on AgricUltulal Labor Supply and Demand Labor Supp17 Labor Demand Peak All Peak Slack All Season Tear Season Season Year Population growth ++ ) Collectivization + Industrial product us'e Food processing Snianing machinery + Irrigation eauiment Threshing machines Transplanting machines Cropping practices Deep plowing Organic fertilizers + Planting & trazzilanting Crop management Cropping cycle Labor-using activities + Winter constaruc-t.on + denotes =ost significant effects ++ denotes major ipact + denotes secondary impact Table 4.12 Supply and Demand for Agricultaral Labor, 1957 and 1975 (Billion Maa-days) 1957 1975 (1) (2) 1. Labor Supply @ 300 man-days A. Low population base .78.1 91.5 91.5 B. Eigh population base - 78.1 101.7 101.7 2. Labor Demand - Total 41.4 93.2 68.3 A. Farm work 30.8 74.6 49.7 1. Cultivation 1+9.7 33. 2. Organic fertilizer 24.9 16. B. Subsidiary work @ 30 man-days 7.0 10.2a 10.2a C. Construction 2.6 8.4 8.4 1. Wiatar works: 100 million 2 50 days 3.0 5, 2. other @ 10 maa-day 3.4a 3 D. Other 1.0 3. Degree of Full lmployment A. Low population base 1. Total labor demand/Total suply , 1.Ob 73 2. Annual work-days per worker 159 301b 21.9 B. High population base 1. Total labor demand/Total supply .53 .92 .67 2. Annual work-days per worker 159 275 201 Source: for 1957, Schran (1969, pp. 64, 75); column totals may not check due to rounding error. For 1975, see notes below, a Derived frcz high estizate (Line 13) of agricultural labor forte, 3ased on rerised calculations of total labor de-and uzIng low est-ata (Lie LA) of a;riculural labor force i= deriving entries for Lines 23 and 2C2. These revisions reduce total labor demand for 1975 by 1.5 bill4on zan-days. Continued..... 132 Table 4,12, continued Line 1. Agricult-ural labor force 1957 260.3 million (Schran 1969, p. 64) 1975 1957 figure plus residual employment increases derived. la : Table 2.9. Line 2. Total labor demand: sum of commo=entz. Al. Cultivation: 107 million ha-. x 1.549 sowings/ha. x 200-300 man-days per sown ha. Sources: cultivated area from Perkins (1975b, p. 353); =nlti-cropping index from -.published materials provided by Prof. Anthony Tang and Thomas Gottachang; labor input from text - 300 days in column (1), 200 days in column (2) A2 Organic fertilizer: sown area as in Al above multiplied by 150 (column (1)) or 100 (column (2))- man-days per sown ha. B. Agricultural labor force (Line 1A or 13) x 30 man-days CZ. Construction: winter works. 100 million participants (Table 4.10) x average duration of 50 days' work7 (based on Nickum 1974, p. 293, who states that "the average participant , . is active for 1h to 2 months." C2. Other construction: agricultural labor force (Line lA or 13) x 10 man-days. Line 3. Degree of Tull employment Al. Line 2 (adjusted downward by 1.5 billion man-days as explained in note b above) divided by Line lA. A2, Line 3A1 multiplied by an assumed full-employment figure of 300 annual workdays. BI. Line 2 divided by Line 13. 32 Line 3B1 multiplied by an assumed full-employment figure of 300 annual workdays. 133 index tends to be higher than in the north. Labor inputs of this magnitude (30 man-days per ou) are occasionally reported even for dryland areas (see 'able 4.7); recently reported labor inputs range as high as 750 man-days per sown hectare (TWheat Studies 1976, p. 24Z). It is therefore not iplausible that the national average labor input per sown hectare is now as high as 450 man-days. Nonetheless, Table 4.12 includes an alternative calculation in which labor input is reduced from 300 to 200 man-days per sown hectare for cultivation and from L0 to 100 man-days for preparation of organic fertilizer. This version, in which the national average labor input for fertilizing and cultivation is assumed to have increased from 13.1 to 20 man-days per mou between 1957 and 1975, surely understates the spread of intensive farm practices (1957 estimate from Schran 1969, p. 107). Other assumtions built into Table 4.12 do not exaggerate the growth of employment; in Line 2b, each worker is assumed to spend 30 days annually in subsidiary tasks (forestzy, horticulture, fish culture, household crafts, dairying, tending animals and poultry, marketing etc.); comparable figures for 1957-59 were 26.9, 28.3 and 15.9 days (Schran 1969, pp. 64, 75). In construction, it is assumed that activity outside the winer camaign period has not changed from the 1957 level of 10 days per rural worker (Schran 1969, pp. 64, 75). These assu.ptions yield shares of construction activity in total workdays considerably below the figures enntioned in section G above, Finally, 1 have based the labor supply calculations on Schran's estimaced oeasant labor for7e of 260.3 million persons for 1957, -acher 7han che lower zotal of 231.5 411on whizh can be obcated by subcrazting n.ca-agricultu-al employmenz and urban unemployment from our 1957 estimate of total labor fcr=e 134 (Table. 2.9). This enlarges the assumed labor supply in both 1957 and 1975. Shifting to the lower estimate of the 1957 agricultural labor force would increase the estimated annual work-days (Line 3B2 of Table 4.12) From L50 to 178 days for 1957 and from 21-275 to 216-296 days for 1975. When compared with Schran's (1969, p. 75) estimates of average labor days per rural worker shown below, our results demonstrate that China's agricultural economy has succeeded in absorbing an estimated total of 78.8 million workers, an increase of0 over the 1957 labor force of 231.5 (Table 2.9; 260.3 million Schran 1969, p. 64), while simultaneously raising the average number of work-days considerably above the figure of 160 achieved prior to agricultural collectivization. 1950-53 119.0 days 1954 119.3 1955 121.0 1956 149.0 1957 159.5 1958 174.6 ' 1959 189.0 Table 4.12 shows that at the very least, annual work-days have surpassed the levels achieved in the tumultuous early years of collectivization. If the intensive cultivation practices observed by the Wheat Studies group are assumed to represent national averages (colum 1 for 1975), China's rural development program can be credited with removing most of the idleness iplied by comparing the employment data of the 1950s with the assumed full-ePloyment criterion of approximately 300 annual work-days. If population and hence agricultural labor force have grown less rapidly than estimaced by John Aird (Table 2.1), :he a=loymen: pic4ure is rresooding: b . ubsicuting rural labor zcocals based hese popuLacia reporzs for :e Hi4zher figures used :o zco=uca anel 33 o' c.ws 135 that average wbrk-days per agricultural worker have reached a minimum of are 21" if average labor innuts 450 man-days per sown hectare for cultivating and fertilizing, Table 4.12 imlies that a full employment level of 30 1 work-days per laborer was reached in 1975. This last result seems exaggerated, and reflects the unrealistic nature of population totals emanating from Chinese sources. The preferred conclusions from this analysis emerge from panel 3B of the table, which shows that employment levels have risen from the 1957 figure of 159 work-days to a 1975 range of 201-275 annual work-days per member of the agricultural labor force. Taking all factors into consideration, it seems most likely that the nationwide average for 1975 is in the vicinity of 250 days. An average of less than 250 days would be difficult to reconcile with the certainty that leading communes in many areas of the country obtain 300 or more days of collective labor from their able-bodied members. Recent demands that rusticated youth spend a minimum of 250 days per year in collective work suggest that the average may not exc!d?50, for despite their lack of far=ing skill, these young unmarried men and women should be able to contribute more labor time than th 5 average commune member. Finally, using the high 1975 estimate of the agricultural work forze (339. 1million workers) and an assumed average of 250 annual work-days we may calculate a national total of 84.3 billion man-days of agricultural work, for 1975. Taken with our previous agrizultural out?ut estimate of 81.914 billion 7uan for 1975 (Section F above), we obcain an average inccme -igure of 0.97 yuan, which is not out of lIe with what little is known abou: average daily remuneration of comune workars. Chapter Five Conclusion A. Emloyment and unemployment in the People's Republic of China China suffered from considerable unemployment during the 1950s. Urban unemployment was widely recognized and discussed in detail in newspaper and journal articles. Unemployment among urban workers declined under the stimulus of economic recovery and growth of investment, but the authorities were unable to cope with movements of peasants fleeing local crop failures or searching for lucrative urban jobs. In rural areas, the problem took the form of seasbnal idleness. The magnitude of rural underemployment is evident from Schran's finding that the average annual number of work-days per employed peasant amounted to 119.0 under the family farming system of the early 1950s, 149-159 under cooperative farming in 1956-57 and 175-189 under the intense mooilization pressure of the Great Leap Forward years of 1958 and 1959 (1969, p. 75). Schran's estimates for the 1950s as well as the data used in the present study are subject to a wide variety of qualifications and incororate substantial margins of error. But despite these difficulties, many of which stem from Peking's unwillingness to publish aggregate economic data on a regular annual basis, careful sifting of available information has made it possible to establish a sound basis for investigating quantitative and quali:ative aspects of China's economy. 3uilding on this formulation, -he present study has :roduced :he i conclus ions.- I. Chi-'a' s ta force ixpand uzi 1957-75 ac abca: a sa=e 7--a as ::s populaci:n. This ex:ansion has raised :he labor S:rce :o a 1 136 137 of approxi.-CE17 420 million persons, or 457% of the population. 2. Growth of the urban labor force (4.5%~ per year) and of non-agricultural employment (5.37% per year) duri=g 1957-75 hnave proceeded at racEs rwell above the est-tad increase in labor force (2.37, per year). These growth rates are well below the growth of no-n-agricultural GZP, which is estimated by Perkins (1976a, p. 16) to have increased by 7.37/0 Per year during 1957-74. .This modest grOwth, relative to output, of non-farm employment stems largely from policies and institutions which have m~oved industr-y, the largest sector of China's economy in tes of outzut value, in the direction of higher cavital coefficients and labor productiv7ity. The low priorit7 attached to industrial labor absorption is evident from the relative growth rates of industrial output (9.77 including handicrafts; ?erkins 1976a, p. 13) and elyment (3.7% including handicrafts) since 1957, and also from the low and declining share of labor-intansive consumer oroducts in the industrial output total.3 The factors underlying =ndustry s relatively slow absorption ofE Libor are discussed in Chapter Three. They include a development, strzatagy which emphasizes the promotion of basic industzies at the national and regional levels, instit'Itional arrangements -which favor the use of capital rather than labor to inc:rease output, specific technological cond-it-Ions at certain tynes of anter-prises, and also a general reliance on fEoreign technologies which inco=oorata relatively high -ratios of ca-pitatolbr This last point is -worth some e=hnasiz. China hias developed iinviua-I manuactuin-orocesses, such as che orodt_ction of; '~rimnicarbonate Eor uise as a fertiliZer, which are noc fou=d ino4r-uc~s. Bti h an Chin=a's i=dusctal oroduccz, -canials and processes are :f-millar :o W~escerr- 138 engineers. Automation is limited and labor intensity much higher than in advanced industrial nations, but the direction of movement is unmistakably toward higher capital intensity, and toward technical arrangements resembling those in the industrial West. If China, with its anti-capitalisc ideology, economic independence and large engineering industry finds it best to apply industrial techniques designed for capital-rich economies, is it not unrealistic to expect other low-income nations to develop and implement substantially different technologies across a wide range of industries? 3. Limited employment creation outside of agriculture, which is broadly defi'ned to include water conservancy and land improvement as well as farming and animal husbandry, has forced much of the task of labor absorption onto the far sector. Agriculture is estimated to have absorbed 78.8 million workers during 1957-75, or slightly over half of the new entrants into the labor force during that period. The growth rate of farm labor force during 1957-75 is estimated at 1.6' per year (Table 5.1), or, with Schran's higher estimate of 1957 peasant employment, 1.5% per year. Agricultural labor absortion has benefited from two major changes in China's rural economy. The first is agricultural collectivization. Formed in 1958, China's rural communes have rebounded from initial difficulties and developed into well-managed units. In recent years, communes have succeeded in mobilizing labor power to exploit external economies without severing the crucial link between individual (or household) effort and income. The second change is the -rowth, beginning in the mid-1960s, of indust--al support f_-r =giuue uch Of it --ro-m rural planzs. Sm,-1-scala indus7-:: ZCTm)i-es =-:w-;m- :chnical skills wi:zi a cl-ose inders-,andin _- 25 a '4 s 45. --::n lcz~ar-e -,r:an olazizs, 139 In reviewing the past t7wo decades of rural development, we see that the direction and labor mobilization provided by the communes has turned out to be highly complementary with growing availability of industrial products and skills in promoting a multi-facated intensification of China's farm economy. Expansion of organic manuring, intensive tilling, multi-cropping, water conservancy and land improvement projects described in Chapter Four not only occupied an estimated 79 million new entrants into the rural work force, but substantially raised the average amount of emloyment for the entire farm labor force of some 310-340 million workers. 4. China has made major steps toward full employment during the past t7wo decades. In this area, as in health, education, regional development and other distributive aspects of economic performance, China's record is most i='ressive. Involuntary unemployment is no longer a serious economic oroblem in China's cities. Peasant i-migration is closely controlled by a system of travel oerits and by location-specific grain rations. Yost peasants are exoected to participace i- winter construction projeczts; chose who travel in search of seasonal noa-far= jobs pay substantial monthly fees to their home units while they'are gone, thus removing the economic motive for seasonal migration' by all except those with prospects of regular work. The only sizable urban group which could be described as unemployed consists of young men and women who have abandoned rural assignments without ?ermission. Bernstein's careful study of rusticated youth concludes that "judging from various estimates that have been made, :here may be several hundred thousand" of these youths "living a kind of semilegal life be14een town and coun:ry" (1977, :. 261). 140 Some of these youths manage to obtain regular urban jobs. Others "sustain themselves by engaging in petty crime or in black market activities" (ibid., p. 93). Even if, as some overseas Chinese visitors believe, the number of returnees who have become "unem loyed" by abandoning their rural jobs includes several million of the 12 million young people transferred from urban to rural locations since 1966, the resulting scale of unemployment among an urban labor force of 67.5 million persons is hardly significant by current international standards. Turning to the rural sector, there can be no doubt of a general increase in the availability of work. The national average of annual work-days per agricultural worker has increased from less than 200 days during the 1950s to approximately 250 days in the mid-1970s. Rural incomes have risen as well: Perkins' GDP estimates L=ply a 77% increase in per capita product during 1957-74. Although the shares of output devoted to investment and defense have increased, the stagnation of urban wage rates has allowed a perceptible increase in per capita rural consumption of both private and public goods. Despite this substantial rise in availability of employment, it would be premature to claim that China's agricultural labor force is fully employed. In Chapter Four, we have found that estimated annual work-days per farm laborer have increased from the 1957-59 range of 160-190 (Schran 1969, p. 75) to a 1975 range of 201-275, with the actual 1975 figure probably lying in the neighborhood of 250 work-days per man-year. This figure, however, conceals important regional variations. In areas with long growing seasons and abundanc su=plies of wacer and organic manures, :ae average number of work-day7s per man-year zar-:4nly exceeds 3CO. 7hse conzi:ions were caserved in norzh and cral China *y :he hese Btudies 141 group (see Chapter Four, section Z); they must also exist over substantial areas of south and southwest China as well. These regions of very high labor demand probably coincide with the regions which Stavis has identified as beneficiaries of complete packages of modern farm inputs (197,", pp. 1-3). Stavis estimates that these areas of "high and stable yields," wides-praad mechanization and very high multi- cropping indices included 20% of China's cultivated area as of the late 1960s. These areas have undoubtedly expanded since then. Since they also include some of China's most densely populated regions, up to one-quarter of China's agricultural population may live in regions in which farm workers are expected to work for 300 or more days each year. If the demand for labor substantially exceeds the estimated average of 250 annual work-days in large areas of the country, it follows that "there may still be absorption problems in the northern plains" where the agricul- tural environment includes both a relatively short growing season and limited and .uncertain water supplies (Schran 1976, p. 11). There are also reports of voluntary underemployment when peasants !ind a shortage of consumer goods reduces the marginal utility of income to a point at which family welfare is i=proved by partial withdrawal from collective farming: The problem is that some peasants are apparently deciding there is little point in working 300-add days a year. The official oress is telling stories of -rral work units where peasants are staving at home or wrangling some other job- which will keep them out of the `ields. .now. . . the incentive system has a big hole in it. There isn't much poin: in working to save money if there is noching to spend the money on. . . What seems :o be happening is :hac some rural flmilies are looking at the situation and deciding there is no point in breaking their collective backs in the fields if it means just a fatter bank account. So the wife stays home and minds the pigs and the cabbages and the husband stays home one day out of three (Munro 1977, p. 12). Despite these problems of seasonal and voluntary underemployment, China has unquestionably achieved major gains during the past two decades in the sphere of rural employment. The spread of modern farm inputs, which has caused serious employment problems elsewhere, has been accompanied in China by a general increase in labor demand large enough to boost per-worker labor input by appro-.mately 50% in two decades. Gains in employment opportunities and the resulting income increases have benefited poor as well as prosperous farming regions. Furthermore, universal collectivization of farming means that underemployed agricultural workers are not cut off from the land. Adverse conditions may prevent certain localities from joining in the general rise in farm output, but all commune members continue to enjoy a share in the income of their commune, brigade and production team. In conclusion, China's employment picture may be summarized as follows. Open unemployment appears Limited to illegal urban residents numbering several million at most. Many of these are voluntarily idle, having chosen to abandon rural employment which would allow them to support chemselves. In the countryside, there has been a general rise in availability of wev:k over the past two decades. Seasonal idleness still exists in some areas, but its extent and duration are much reduced in comarison to the 1950s. The past year has wi:nessed new problems of voluntar7 rural idleness, but :nese ma-7 be localized and are in any case amenable :0 solu:iOn by adminisr za- zhanges -r e::orts :o iz=rove rural supplies c, -onsumer goods. Despi4ce 2s he i=~roved availai -f;nki a :L=r ss~~ach- -Emp- 143 for a densely populated country with an average income level of approximately US $200 per head. 3. China's labor market prospects The uncertainty surrounding e.xisting estimates of the size and demographic structuxe of Chin-'s population makes it very difficult to attempt a forecast of future trends in labor supply and demand. Nevertheless, it is possible to draw some broad inferences regarding probable trends in the size and structure of the labor force and in the balance between labor supply and demand. Table 5.1 contains projections based on the simplest of assumptions regarding demog-aphic trends. The total labor force is projected from 1975 to 1990 under two assumptions: a decline to 2.0% or an increase to 2.5% from the.2.3% annual growth rate derived for 1957-75. The apparent downward trend of birth rates and of China's rate of natural increase suggest a reduced rate of labor force growth, but this can be offset by changes in age structure about which little is known. Non-agricultural employment is projected forward at the same growth rate, 5.3% per year, observed during 1957-75. It is possible that the dissatisfaction of industrial workers with their static wages and the need to maincain work incentives in the countryside may lead Peking to start a major program of invest-ent in relatively labor-using consumer manufactures. On the other hand, recent policy stacements asphasizing mode=izacion and technical developmenz suggesc that the unfavorable relazionship becween industrial output and employment growth =ay be maincained. In additiOn, indusZ71 poor )er:ormance in the pasc :hree years =ay have long-cer= as well as tsi:ory causes. 1f so, a slackening of industrial growth =ay damven the 14.4 Table 5.1 Labor Force Projections, 1957-1990 Year Labor Force Non-Agricultural Ag.cultural Employme at Employ=eat I. Absolute Figures (Millons) 1957 279.3 42.3 231-5 - 1975 418.9 107.6 310.3 1.990 A 563.8 233.5 330.3 B 606.7 233.5 373.2 II. Average Annual Growth Rates (%) 1957/75 2.3 5.3 1.6 1975/90 A 2.0 5.3 0.4 3 2.5 5.3 1.2 III. Annual Increments (Millions) 1974/75 5.7 9.6 3.9 1989/90 A 11.& 12.4- -0.8 3 14.9* 12.4 3.0 Sources: data for 1957 and 1975 are from Table 2.9 , agricultural employment is derived by subtracting non-agricultural employment and urban unemloyment from total labor force. Figures for 1990 are derived using assumed growth rates as exmlained in the tex-,; agricultural employment is obtained by subtracting non-agricultural ecployment frcm the total labor force (i.e. assuming zero urban unemployment). Annual increments are calculated by assuming that the average growth rate for each time interval is observed durimg every year of the interval; the annual increment for agrtcultural employment is derived as a residual. 14~5 prospects for non-agricultural employment. In sum, a continuation of the 1957-75 growth rate for non-agricultural employment may represent an ambitious target, but one which is certainly attainable. These simple but not iplausible projections suggest that if China can sustain past rates of increase in non-agricultural employment without allowing any increase in the growth rate of population, and hence of labor force, the problem of agricultural labor absorption will begin to recede during the coming decade as annual increments to the agricultural labor force decline from the levels of the recent past. if the growth rate of non-agricultural employment is maintained and labor force growth slows to 2% per annum during 1975-90 (Version A), the agricultural labor force reaches a projected peak of 331.3 million persons in 1987 and begins to decline thereafter. Under the less optimistic assumption that labor force growth rises to 2.57 per annum, agricultural labor force reaches its peak during the laze 1990s. Using reasonable assumcions about the growth of total and non-far= labor force, China can thus expect to enter an era of declining rural labor force sometime between 1985 and 2000, with the exact date of this curning point depending on demographic factors and on the rate and pattern of expansion in the secondary and tertiary sectors of :he economy. The agricultural )roductivity data in Table 5.2 emphasize the I-orrance of speeding the reduction in increments to the agricultural labor force. The 7=owth of modern inpucs, intensification of the fa=ing sys-em, and substantially higher labor inpuc3 have joinlyr increased the average value of agricultural outpuc per zember of the agcultural labor force. 7he exacz amoun: of the increase depends on which version of :he 1957 ag ul-- al 146 Table 5.2 Agricul,tural Labor Productivity, 1957-1975 Version A Version 3 1957 1975 1957 1975 1. Gross Value of Agricultural 53700 81914 53.700 81.914 Outmut (Bill. 1957 yuan) 2. Labor Input into Agriculture Million Man-years 231.5 310.3 260.3 339.1 Billion Man-days 41.4 77.6 41.4 84.8 3. Labor Productivity Yuan per Man-year 231.9 264.0 206.3 241.6 Yuan per Man-day 1.30 1.06 1.30 0.97 Sources: Line 1: Table 4.9 and accompanying text. Line 2: Man-years for Version A, from Table 5.1; for Version B, 1957 figure is Schran's (1969, p. 64) estimate of peasant employment; the 1975 figure is obtained by.adding 78.8 million persons, the same increment used in Version A. Man-days: for 1957, from Table 4.12, Line 2; for 1975, calculated on the basis of 250 annual work-days per man-year. 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( ,-� (и д- р `г� р о R. г� v� р н, ,( ь�• n� ь ь, ;.. . ьу r� n. т w ' о о а ь~-• н, ст �' 1 гНr гу �j � ц гr С ги гь т ид <✓ г�• ь-� t-�• W w г-� го а� б rt, Е `С t-'• Н N :г rt ь г ги rг и н го о R� n гn (Э с, д го t�• ;у rr р n ч iu tл г-� ~С N ty 'ьNу г1 Н � . � г гг го о 1а т р � ги � гv о и о р. � н, и г-� п • п t1 и N' ао :i ,й rt и Г�- р N „ f,. го О . ь'7 t � lack of interest by scientists IM problem oriented research, or more likely a combination of such I:actors. One -gets the i= rassion that much Chinese agricultural research is cu=ently stagnant. in o-eneral scientists were not aware of work in other prov4zces 0 Chinals scientists have been, and still are, out of Coutact with the maiastrea= of international sciantif'ic acti7-;t- V probably because national efforts are f2ocused on productio-n. Consequerntl7, we found scientists generally unaware of advauaces occurring elsewhere, MZM7 that could be or great beme--;it to Chinese agriculture. . . . the absence of active field and laboratory war!-, on some of the major agzonomic problem,; was noticeable at all institutions visited (Plant Studies 1975, pp. 119-121). Correction of these weaknesses could lead to substantial out-out -rcwth and major 4ncreases in labor requirements: Sail classi`ifcatio-a studies 'nave not really been introduced at the co-ne level, and when this occurs mew inior-matiorf will make it possible for production teams to use chemical fertilizers more efficiently. Hydrological wark to measure -Ile proper --Tn U=t of ix-ti-ation for dif`arent soils on communes is st411 in its iz1fanc7. Is more farm land becomes -irrilgated, such information w-ill enable communes +.-a make aotimal wo-olication of water to wheat and other crops. The development or these and other scifantflfic work most certainly raise wheac yields. . .Lf; the present wheat research system can be encouraged ta produce them ('Mysrs 1977, pp. 41-42). 7he qUeSt4om 'nere 4S winecher and IJ: so, how rapidly Chinese sc4eac-ffic institutions can reverse the present weak state of the agr-4culzuzal sciences. Recent e=pha-sis on science and technology 4n oi-ficial media Indicaces --hat one obstacle -- "lack of conviction of cent-ral authorities that more 4undamental =asaarzh is 4 ---portanz" -- :aa-y soon vanish. The orobl-i of recur-as oz fers a =re general- barr4-_r to ag-r-iCul tural Labor absc=tion. As annual work-davs rise toward :.he ampioymezz max:L_-um, cc-_t:4:zued raduc:4ons _-'= ouc-put oer =pn- 4a,7 :Must to reduced; leve-s 0Z per -=-year. in tux-_ will lead --o reduczic=s 130 in at least the agricultural component of per capita incomes in the country- side. These dangers are partially recognized by Chinese economists: The general tendency is that with continued advancement made in science and technology and with more fertilizer and other investment put into each unit area of land, the output will also increase gradually. This is where we fundamentally'differ from the pseudo-scientists of the bourgeoisie concerning the law of "diminishing returns from land." But under given conditions of science and technology, when other measures for increase of production fail to catch up, each unit of investment in fertili- zer will yield lower results (Yen Jui-chen 1964, p. 20). Yen Jui-chen admits that the marginal product of individual inputs may decline as their application is increased, but i=olies that returns from packages of complementary inputs will not decline as their application is increased under conditions of "continued advancement made in science and technology." This implication, however, may be questioned. We have seen that simul- taneous increase in supplies of a whole range of modern inputs have not prevented a sharp decrease in average output per man-day at the national level. Critical reports by well-qualified visitors, who are presumably taken to inspect outstanding rather than typical facilities, force us to quescion the existence of "continued advancement" in branches of science and technology which are closely related to farming. Finally, reports describi=g the experiences of oarticular regions in applying integrated packages of modern fam inputs specifically raise the possibility of more generalized diminishing returns: whac needs attention is that some production unizs, chough raising outpac through a change in :he cropping rocacion S7s tam, have had :o invest excessively, vi:h ;he resul: c pe per-uni: cost o product and lador produccivi-a are adversely] affec6ed (LiD Chih-chang . -2152. Reduced grain output per work-day was among the possible outcomes in four of five intensified rotation patterns described in this reUort; !wo of the five cases included the Possibility of reduced income Per yuan invested in irrigation, chemical fertilizer, machinery and electricity (ioid., 5). The large number and complex interaction among factors affecting the future balance between the supply and demand of rural labor make it i=possible to offer a forecast of the extent or duration of possible labor absorztion problems in rural China during the next decade. Regional or national absorption problems may appear as long as the agricultural labor force continues to grow; rapid mechanization can cause problems even after the farm labor force begins t- decline. These di2ficulties can be ameliorated or perhaps el'minated by further increases in the availability of comlementary inputs, especially fertilizer and water, by scientific progress which imroves existing inputs, especially seeds, or helps farmers to combine inputs more effectively, by rapid labor absorption in non-farm sectors and by a reduced rate of population growth. Conversely, reduced growth of modern farm -nputs, failure to upgrade agriculZural research, slackening of non-agricultural output growth or higher birth races can all be exectad to enlarge the task of rural labor absorocion in the coming decade. C. Transferability of Chinese exer4enca to other countries China's considerable achievement in providing rising levels of mploymenr for growing ur'ban and rural populations naturally raises the question of che relevance of Chinese experience to the oroblams of countries whose ocical and social as well as economic systems nay differ widel, from China' s. Several fundamental features of China' s Political economy appear to sca-d in the way of wholesale application of Chinese approaches to pro'ms 152 confronting other LDCs. First, China's climate, topography, farm technology and agricultural population are all well-suited to the system of intensive agriculture built up over the centuries and further developed over the past several decades. China's farming technology, and especially the wet-rice culture of the south, proved its ability to absorb large increases in population and labor supply per unit of cultivated area centuries before 1949. Recent reforms in cultivation practices consist to a large extent of introducing the technology of rice culture, with its transplanting, irrigation, heavy fertilizing and intensive plant care, into northern and central regions in which irrigation was previously the exception rather than the rule. Pursuit of intensive farming patterns presupposes-a farm labor force which is prepared to devote long hours to careful tillage during the growing season and to comnosting, land levelling and maintenance of irrigation works in the off-season. Progressive intensification of farming also requires widesnread entrepreneurship among the farm populace. Even a casual acquaintance with conditions in various Third World regions provides frequent instances in which socioeconomic conditions make it difficult to anticipate the calculating and aggressive response to economic opportunity which seems typical of both urban and rural populacions not just in China, but throughout East Asia. Effective administration at all levels of gover=ment is another inheritance- from China's past which provides an essential link in the current economic system. In the countr7side, substantial male literacy, a :=adcicn o f -eportD.g ocal zrice and outuz data for major crops, and keeping of records ,n onnec:4an wth rrigazion and Zarketing ze:vorks ror=ec a :ouncacion uon .hic zociue ad=niszracion zcu-'d e buile (Rawski 1976b, 9, -39). -he 1.53 strength of rural administrative capacity was evident soon after 1969 when the new goverent succeeded in establishing a wide array of financial and marketing organizations operated by non-elite rural dwellers who were not among the victims of the extensive and violent land reform campaign (Shue 1976). The communes which succeeded these early cooperatives have occupied a significant role in the process of labor absorption described in the previous chapters. Water conservancy and enlarged attention to animal husbandry, horticulture and forestry are aspects of agricultural intensification which owe their existance to rural collectivization. Local industry, which requires administration and organization not only of production, but of distribution and, for machinery, of maintenance and repair work as well is another component of China's rural development program which appears virtually inseparable from collectivization. Some features of recent agricultural reforms such as increased per-acre inputs of organic fertilizer and manpower could easily have developed under a system of family farminz. But others ranging from livestock insurance and road building to rural power grids and canal systems could hardly have developed as rapidly in a market economy as under the present system of socialized farming. More generally, China has benefited from a tradition of social control which has been reshaped to meet the goals of a new leadership. Social control enables the Chinese government to i=lement policies which night be difficul: or i--ossible elsewhere: stenli rising capital formation proportions; rescrc:ion of peasant migration to the cities; enforced migration of educated urban elites to agricultural communities; intense pro-caganda affor:s aired at zrainizg localleaders to adhere :o central policy guidelines wi:hou: clse 154 supervision. A.whole series of programs aimed at reducing rural-urban differences has helped China to achieve a well-integrated administrative system in which the combined bureaucratic and practical skills of local officials contributa to effective policy i=plementation at the grass roots level. An unusually large, well-established and widely distributed industrial sector is a final feature of China's economic life which is not often duplicated in other low-income countries. Industry replaced agriculture as the largest contributor to China.'s aggregate product during the 1960s, and economists agree that this is not a statistical illusion caused by price distortions. The scale of industry is large by any standard. China now produces more machine tools than any nation except the USSR. In terms of manpower, the state sector alone employed 24.8 million workers in 1975, or 4.4 times 1971 Indian employment in factories and mines (Weisskopf 1974, p. 35). Industry is no longer concentrated in a few coastal centers, but is widely dispersed throughout China's provinces, counties and even communes. This change has far-reaching implications: A hand tractor imnorted from JaDan would have the same OhVsical productivity as one made in China, but it will certainly not have the same impact as one made in a Brigade or Commune machine shop where every peasant knows someone who helped build it. By pushing the production of particular agricultural machinery all the way to the Brigade level, China Las removed the "foreignness" Zrom new technology. Not only will this speed adoption of the technology, but the presence of the factory and machine shop locally means spare parts and repairs are readily available. The level of ucilization of machinery locally produced is :hus likely to be 'ar Hig-her :han of machinez- ioor:ed from higher levels or abroad for which no sucH capabili:y ex'szs (RSSI, ChaFeor ?ur). Finally, decades of experiance both before and after 1949 led to an accumulation of problem-solving capabilities wizhin irdustry. These skills are the f:uit of China's isolation from trade and outside aid. They represent another crucial Lngradient in recent economic gains which will be difficult for many LDCs to match. These observations underline Keesing's (1975) view that the unique features and integrated nature of China's socia-economic system make it difficult to envisage ready transfer of the strategies and mechanisms which have contributed to China's economic achivements. Even so, China's success in enlarging employment opportunities for the world's largest national labor force provides an encouraging and instructive example to those concerned with eploymenc problems in developing nations. 156 Appendix A Estimates of Employment in Leading Small-scale Producer Industries Coal. -- Chinese sources have oublished no absolute outDut data for coal since 1960. Close study of statements about annual output changes show that 1975 coal production cotalled approximately 427 mmt, of which about 120 =t came from small mines (U. S. Central Intelligence Agency 1976b, pp. 5, 10). In 1976 it was also reported that "there are 3,000,000 stafF and workers in China's coal industr" (BBC W906 (1976), Al; repeated in Peking Review 49 (1976), p. 10). Labor productivity at the large K'ai-lan mine complex in Hopei province, a model industrial unit, may be calculated as follows: output from Jan. 1 to Dec. 23, 1975 was 25.2 million tons (BBC W870 (1976), A9); the complex employs 100,000 miners (BBC W882 (1976), A7). Assuming no change in employ- ment during 1975-76, labor productivity for 1975 becomes 365/357 x 25.2 x 106 X 10-5 = 257.6 tons per man-year. Assuming 300 days of work, this imlies average daily output of .859 tons per worker, which is less than the figure of .978 tons per man-day reported for all personnel of the coal industry in 1957 (N. R. Chen 1967, p. 263). If 'ai-lan's output of 257.6 tons per man-year 4s representative of large mines generally, employment at large mines may be estimated az 307 x 106 cons / 257.6 tons per worker or 1.19 million workers, leaving a total of about 1.81 million workers associated with small mines. Small-mine productivity is then approximately 120 illion :ons/1.31 million workers or 66.3 eons per man-year. This imlies zhac mosc small oal -uzou: zcmes zoom count--rn mines whi are e:zr cc ::ae primiive commune facility described in Y_orzhouse. (1976, p. 388) in which Iabor producti.vity appeared to be approximately 31.8 tons per an-year. Power. -- Small iydroelectric stations accounc for 20% of China's hydro- power capacity (Paking Review 21 (1975), pp. 30-31). Hydropower caci:y is estimated to account for 28% of total power generating capacity (1971 estimata from PRawski 1973, p. 27). Assuming equal power output per unit of capacity in all types of generat4ng facilities, hydropower output is estimatzd as accounting for 28% of total power output. Power output is somewhat controversial: I estimata 1974 output at 133.8 billion kwh (Rawski 1977a, Table 111-23); if output rose by 12..0% during 1974-73 (U.S. Central Intalligence Agency 1976a, p. 1; the same source estimates 1974 output at only 108 'oillion kwh), 1975 output becomes 150.0' billion kwh, of which 28% or 42.0 billion kwh is assumed to have come from hydro stations, with 20% of the hydropower total or 8.4 billion kwh assigned to small hydropower plants. In 1975, visitors to a county power station in Li. county (Honan) were told that the 2500 kw- installation produczd over 9 million kwh of power annually and empoyed 43 persons (?SSI, Chantar 4). I the implied labor productivity of 209,302 kwh per =an-year is take as cypical of smal1 hydropower plancs, 1973 emoloyment in these.plants can be esz.-:atad ac approximataly Ll,000 persons. Cement. -- Chinese sourczs indicat2 tocal 1974 output of 31.6 =t, of wh4ich L6.L -,t came from small plants (Mc=ariane 1975, p. 315). Cnn outzuc rose by an est--maed 18.7% during 197--75 (U.S. Cenrral Incelligence Agency 1976a, . 1). I.f ourput from Large and small :planCs e coerher, 1975 output from small plan:s would be 16.4 c 1.187 or 19.5 cz. Visits :o chree Leading plants in h smal-scae cemen: seor 158 elicited productivity figures averaging 165.0 tons per man-year (RSSI, Chapter 4; chis is 1976 output divided by 1975 employment at the three plants taken together). Employment in the small-scale cement industry may therefore be estimated aer worker at 19.5 mmt/145 t.,or approximately 134,500. This figure is undoubtedly too low because of the advanced status of the plants visited. Fertilizer. -- Production of chemical fertilizer in 1974 is estimated at 24.88 mmt (in standard units) of which L5.81 mmt consisted of nitrogenous fertilizers. Small plnnts produced 54% of nitrogenous fertilizers (U.S. Central Intelligence Agency 1975a, pp. 4, 8). Fertilizer . ::put rose by an estiated 12.0% during 1974-75, giving a 1975 estimate of 27.9 mmt (U. S. Central Intelligence Agency 1976a, p. 1). Assuming ao change in the produ.t mix or output shares of large and small-plants during 1974-75, total output of nitrogenous fertilizers becomes 17.71 mt, of wich 54% or 9.56 mmt is attributed to small plants. Small plant production of 9.56 mmt in terms of standard units of 20% nitrogen content indicates small plant fertilizer output containing 9.56 x .2 = 1.91 mt of nitrogen. Pooled output and employment data for three plants visited by the Rural Small-scale Industries group in 1975 indicate average labor productivity of 18.3 tons of amonia per man-year (1974 output divided by 1975 emloyment). Using the conversion factor of 0.82 cons nitrogen per ton of ammonia, this becomes L5.0 cons of =itrogen contanc oer nan-year. If chese plants are representazive of small plants as a whole, -e may concLude :har snall oans produci :- gous ai 7oyed apOroxate 7 3 rs In the absence of details an operations in small plants producing other types of fertilizers, small plant employment in these sectors is estimated as follows: for phosphates, which accounced for 34.6% of 1974 output tonnage in standard units, of which 75% came f=om small plants (U.S. Central Intelligence Agency 1975a, op. 4, 8), I assume that 1975 employment per ton of standard product was the same as in small nitrogenous fertilizer plants. The latter group accounted for 34.3% of total product weight;,small phosphate plants accounted for 34.6% x .75 or 26.0% of product weight. I therefore estimate employment in small phosphate plants as 127,333 x 26.0/34.3 or 96,521. Potassium fertilizers, which accounted for only 1.8% of 1974 fertilizer output are ignored. Our estimate of employment in small plant fertilizer outout then becomes 223,854 or about 224,000 workers. Machinery. -- Estimating employment in small-scale machinery plants is not easy. Most small plants concentrace on production of farm machinery, parts for farm machinery and repair of such equipment. The present estimate is compiled by assuming that small machinery plants devote themselves exclusively to the manufacture and repair of fam equipment. Agricultural machinery and equipment accounted for 6-77 of overall machinery outmut in 1956 (Chao I-wen 1957, p. 43). This share has certainly risen considerably since then. I assume that the share of fa= machinery in total =achinery outut was 15 in 1975. Two-thirds of China's farm machi.ery came from small plants in 1966 (3iskin 1971, p. 271); I assume hac the relevant oroporzion has since risen to 75%. Chinese statements indicate that 1972 output of all t-pes of machiner amounced to 36.725 billion 7ean (Rawski 1977a, Table I7-7). If 1975 160 machinery outut is 45.4% above the 1972 level (U.S. Central Intelligence Agency 1976a, p. 1), 1975 output becomes 126.098 billion 1952 yuan for all machinery, 15% of this amount, or 18.915 billion 1952 yuan for farm machinery, and 7570 of this latter amount, or 14.186 billion 1952 yuan for small plant output of farm machinery, which we equate with total machinery output from small plants. Since 1975 machinery prices are approximately 57.7% of the 1952 levels, output of 14.186 billion 1952 yuan is approximately equal to 8.185 billion yuan in terms of 1975 prices (see Rawski 1977a, Table IIIA-1). Labor productivity is estimated on the basis of information collected from ten enterprises in the agricultural machinery field by the Rural Small- scale Industries Delegation in 1975. These data appear in Table A-1. Productivity at the Shanghai Feng-shou Tractor Plant is far higher than at any of the others; clearly the performance of this large unit has no bearing on average productivity at small-scale enterprises. If this plant is excluded, average output per man-year i3 6,371 yuan. Even this is a very high figure; one must assume that the inclusion of data from model units often shown to foreign visitors (Rad Star, asiyang and Lin Counties) and of units in China's most advanced industrial region (Shanghai, Wusih) results in a productivity average which is substantially above the national average. Accordingly, I arbitrarily place 1975 average labor productivity at 4,000 yuan. This yields an estimated 1975 labor force in small-scale machiner-y manufacture of 8.185 billion/4,000 or 2.046 million workers. I.n and sZael. -- In 1973, small :Ilants orcduced an es:iaced 21. of D4-, izon ancd If"..f :=_de Stae7 ZutDu:. 7 ass=-e 7ha 9 75, s=al1 >Ia:s Table A-1 Labor Productivity at Selected, Far Macinery Plants Gross GutOut Emil oment Productivity flr 1974 1975 yian 1000 yuan Municip-a! mlants 1. Shangh-ai Ferg-ehou Tractor 80,000 1300 51,538 2. Esinhsiang Water P,= 7,100 680 10,41 3. Esinzsiang Fer". Ec:ip. PI. 1,300 - 330 3,939 County plants 4. Esiyag (Shansi) Tractor PI 1,044 310 3,368 3. Lin (Hoan) Tung-fang-hung Pl.!,000+ 300 3,333+ 6. Vuhi (Kiangsu) Tractor Pi, 6,000 661 9,077 7, Shanghai Chia-ting County PI. 1,800 450 4,000 Cmmune plants 8. Red Staz (Peking) 575 261 2,203 9. Yao-ts'un (Lin, Eocac) 450 90 5,000 10. Tagsi Ksa iangýsu) 1,6c0 1'92 8t,33 3 Total 100,860 4574 - 22,033 Total for mia-t 2-10 only 20,860 3274 6,371 Source: RSSI, chapter 4. Tiaant is adninist-red by Tsi1-4siang prefectuze, =oran. 162 accounted for 18' of gross output value in ferrous metallurgy. 1974 gross output value in ferrous metallurgy is estimated at 44.840 billion 1952 yuan (Rawski 1977a, Table 111-19). If gross output value rose in oroportion to crude steel oucput during 1974-75, the estimated increase of 9.2% (U.S. Central Intelligence Agency 1976a, p. 1) yields a 1975 gross output figure of 48.965 billion 1952 yuan for ferrous metallurgy or, since 1975 steel prices are estimated at E0.9% of the 1952 levels, 29.820 billion 1975 yuan, of which 18% or 5.368 billion yuan is linked to small plants (see Rawski 1977a, Table IIIA-1). Labor productivity is estimated on the basis of a single observation: a Wusih (Kiangsu) County Plant whose 805 workers produced steel ingots, reinforcing rods and angle irons valued at over 9 million yuan during 1974 (RSSI Notes). Our labor productivity figure thus becomes 9,000,000/805 or 11,180 yuan per man-year, which yields an employment estimate of 5.368 billion/ 11,180 or 480,000 workers. 163 Notes to Chapter One 1. The only evidence of opposition to mechaniz?tion among the farming populace which I have encountered is in a 1957 article comparing the response of eo cooperatives in Hotze County, Shantung to tractor plowing. One commune welcomed tractor plowing, devoted 24 man-days per Mou to wheat culture, and reaved a harvest of 106.5 kg. per mou. Fearing a loss of e=loyment opportunities, the other unit rejected tractor plowing, devo ted only 18 man-days per mou to its wheat fields, and harvested only 70 kg. per mou (Euang Ching 1957, pp. 36-37). Widespread opposition would normally give rise to many detailed articles contrasting the gains from mechanization with lesser results achieved without it. 2. The Pural Small-scale Industry Delegation reports that From our observations and discussions in China, we believe that the annual tractor and power tiller usage is about 2000 to 2500 hours, which is almost four times that of Japan and about 2.5 times that of the U.S. This high degree of tractor and power tiller usage is possible because machines are often used around the clock with three operators during the busy harvest and planting seasons, and are also regularly used for transport throughout the year (RSSI, Chapter Five). 3. Age and sex distribution in the 1953 census are given in Aird (1968, p. 273). Aird also presents six model Populations for 1986 in which the age and sex distributions are not markedly different from the 1953 figures (pp. 308-9). 164 Notes to Chapter Two 1. Recent studies of China's population include Aird (1974), Orleans (1972), Tien (1973)and Banister (1976). For examples of low birth rates and rates of natural increase, see Sidel (1973, p. 57). 2. Barnett (1974) quotes the following statement by Deputy Premier Li in a 1971 interview with an Arab newsman: We have been racing against time to cove with the enormous increase in population. Some people estimate the population of China at 800 million and some at 750 million. Unfortunately, there are no accurate statistics in this connection. Neverthe- less, the officials at the supply and grain department are saying confidently, 'The number is 800 million people.' Officials outside the grain department say the population is '750 million only,' while the Ministry of Commerce affirms that '-the number is 830 million.' However the planning department insists that the number is 'less than 750 million.' The Ministry of Commerce insists on the bigger number in order to be able cc provide goods in large quantities, The planning men reduce the figure in order to strike a balance in the plans of the various state departments. 3. Orleans (1972, p. 65) states that "It was commonly reported (and usually accepted) that the urban population of China increased by some ttenty million persons during the Great Leap, over a 1957 figure of almost ninety million. Some estimates of urban population in 1959 ran as high as 130 million." 4. Pi-chao Chen (1972, pp. 373-74) cites statements indicating that Chinese officials may have hoped to stabilize the urban population at 110 million during the mid-1960s. 5. Recent municipal population figures are from Chinese publicacious and visizor accounts; 1958 figures from Ullman (1961, pn. 35-36). The recent figures are not all for the same ear; in eaca zase :he :fgure s :zo 7974- -,as selac:ad. Sepazaza increases o-f -5and 57. -waze :a-*-u-'-:adf the lower and higher of alternate recent Dopulation figures for several cities. In most cases, the lower figures appear to refer to the urban area only, while the larger figures seem to include suburban and rural areas administered by municipal governments. 6. Tsu-kuo hsin-kuang ch'eng-shih (1974). 7. aowe, for instance, estimates open unemloyment i Shanghai at over one-half million during 1957 (1971a, p. 39; 1971b). See also Orleans (1972, op. 63-65). Chinese observers measured "temporary and floating" populations of the cities in the millions (SCIV 1764 (1958), p. 39). 8. CCAS (1972, pp. 276-78) describes a housewives' factory. A typical Chinese report notes that "'iomen dependants of workers and sca:E of plants, mines and other enterprises in Si=ing Municipality had set up 93 factories by the end of 1975 with over 9,200 women depeadants working in them"l (BBC W878 (1976), A6). 9. This was the impression of the Rural Small-scale Industries Delegation, sponsored by the Committee on Scholarly Communication with the People's Republic of China, National Academy of Sciences, of which the author was a member. This group visited China during June and July, 1975. 10. Peng Pu Commune, with 3,721 famlies, 5,121 female and only 3,431 male able-bodied workers, had sent 1,700 workers, mostly male, :o jobs in Shanghai. Another unit, Hsin Lung San Commune, reported 10,130 families, and 7,101 female and only 5,689 male workers. It coo had undoubtedly provided male workers to outside units. Dat= from 3urki (1969, op. 72, 75). 11. The broad accuracy of our 1957 Labor force esti-ces is conz=ed by Wang Kun-wei (1957, p. 12), a 7ice-Chairman of the Scace Planning Comission, who states chat che number of labor-force units (lao-cunme-Li) 166 in 1957 was approximately 260 million. 12. in addition co enterprises owned and managed by rural communes and brigades, there are also urban collective industries. However the borderline between urban state-owned and collective industries is not distinct: visitors to Peking West District Optical Meter plant, an enterprise employing 520 workers which had changed from collective to state-owned in 1969, were told that since urban collective units are supporced in part by grants if material, equipment and other resources from state enterprises, the distinction between state-and collective enterprises in the urban sector is not great (RSSI Notes). Urban collective enterprises appear to consist mainly of small units attached to residential districts or set up to use waste and scrap materials generated by larger enterprises. Peking Review 20 (1976):22 gives further examples of urban factories switching from collective to state-run enterprises. 13, Since I have not encountered use of full-time equivalents in Chinese sources and repeated questioning during several comune visits in 1975 failed to elicit any suggestion that full-time equivalents were used in those units, I assume that Chang's data refer either to participants or to full-time employees . in collective industry. The former alzernative appears more Orobable. 14. Chinese industrial output data are comiled in terms of gross output (approximately equivalent to sales value) rather than value added. Handicraft and factory output were compiled separately during 1949-57, but the two categories have been reported jointly since 1958. For more information on the definition and scope of GVIO, see Field, Lardy and E=erson (1975, Chapter 2; 1976, Chapter 2). 5. The !zade series for :ocal recall ,o I=e and fr : v01une 167 of commercial organizacions, are shown in N. R. Chen (1967), pp. 394-95). 16. Data on number and composition of reachers and employees in education and culture in 1957 from Emerson (1965, pp. 93, 128). 168 Notes to Chapter Three 1. Chinese-language booklets purchased by members of the RSSI group include the following: Vigorouslv ExDand Hog-raising, 110 pages, 1st princing of 34,800 copies, cost 0.27 yuan. 2nd collection, Peking, 1975. Basic Lathe Knowledge. 109 pages, 1st printing of 255,300 copies, cosc 0.18 yuan. Printed in Yunnan province. Talks on Increasin2 Production and Practising Economy. 56 pages, 1st pri;ting of 150,000 copies, cost 0.1-3 yuan. Shanghai, 1974. Collection of Exueriences of Bumoer Wheat Harvests, 138 pages, 1st printing of 100,000 copies, 0.38 yuan, Peking, 1975. Urban workers and employees typically earn approximately 700 yuan per year; rural incomes are lower, but both groups can afford to buy these booklets. 2. This section draws on Rawski 1975a, 1976a. 3. Fei-ch'ing nien-oao (1967, pp. 850-54) gives a list of plants which received foreign technical assistance during the FFYP years. 4. Field (1975, pp. 165-67) gives time series estimates of comodity output for a number of industrial products. 5. Rawski 1976a. 6. In this connection, it is somewhac ironic to find foreign observers co=menting on the excessively labor-intensive nature of operations at major Chinese plants (e.g. Canadian Mission 1973). 7. Discussion of Ta-lung Machine Works is based on ?awski (1975'o ard 1976a), 3. The processing and other ac-ivi:ias :ransferred in 1957 frm agriculcure to' industry generated 15.4% of the gross value of agvicultural output in 1955 (511d, Lardy and Emerson 1975, pp. 5, 47). Gross agriculal out-ut for 1975 is escimatad at 81.9 billion 1957 yuan (Chapter Five) or about 91.7 billion 1952 yuan (conversion is based on data from N.R. Chen 1967, p. 365). If the transferred processing activities still accounted for 15.4% of the combined 1975 value of agricultural and processing output, then the 1975 value of these processing activities is obtained by solving the following equation for X: . - .154 ( X + 91.7) X = 16.7 billion 1952 yuan, or 26.1% of estimated 1975 output from coillective industry (Table 3.7). 9. The Ta-cs'ai-yuan Brigade of Ch'eng-kuan Comune, Lin coun7, Honan, reports that overfulfillmenc of its grain sales quota enables it to purchase additional supplies of chemical fertilizar (RSSI xcas). Ishikawa (1974, p. 22) estimatas that the 1972 equ:ilibrium price of amonium sulphata fertilizer was approximataly double the actual transfer price. In 1973, visitors to a Kwangtung comune wera told that "we have the 1unds to purchase more vehicles, but the State does not have enough vehicles available" (Steinle and Prinz 1973). 10. Invest=ent costs reportedly ranged from 18 yuan per con of cazacity at mines producing under 15,000 tons annually to 23 yuan/ton for Mies producing over 90,000 tons per year (JIP March 3, 1958). Produc:ion cost, on the other hand, is inversely relatad to scala, ranging from 11.70 ylian per ton for small -ines to 11.17 and 9.75 yuan/ton at =edium and large facilities (Chuoku shiro VenO 130 (1958):21). 11. Daza for two ferrilizar ?Iants visited by :he RSSI 7roup indicate annua, rates of recur to conszruccion cost of 17% and 33% respecci,elv. The 170 for interest on fixed capital. 12. In this particular case, power generation is-a byproduct of a multi-purpose project designed primarily to provide wacer for irrigation. 13. Although there are no detailed studies of rural-urban income differentials, a survey of evidence by 'Whyte (1975, p. 687) concludes that "With 11l of these imponderables, no exact figures can be given, but it seems realistic to consider that the urban-rural income differential is something on the order of 2:1 (whether considered on a per capita or per labourer basis)." Only a tiny minority of farm workers can hope to earn annual incomes of 600-800 yuan which are comon among even semi-skilled industrial workers. 14. These issues are discussed in Perkins (1966, Chapters 8-9). Notes to Chapter Four 1. Discussion of comune organizaticn in the following paragraphs is based on Crook (1975). China's small system of state farms is ignored. 2. Japanese figures calculated from Tsuchiya (1969, p. 158) and Hayami and Ruttan (1971, p. 340). 3. One way of tracing the spread of electricity in the countryside is through the growing number of articles in Chinese far= journals warning of its hazards, emhasizing the need to keep power Lines above ground level, and describing first aid for shock victims. 4. Plant scientists observed "on farmers' fields there was evidence in most areas visited of a nitrogen shortage for rice. It appeared that some nitrogen had been appTied, but the leaf colr often suggested that this was inadequate" (?lant Studies 1975, p. 46). For similar observations on north China, see Schran (1976, p. 20). 5. Bernstein (1977, p. 153). 172 Notes to Chapter Five 1. Widespread concensus about quantitative 'rends in China's economy was evident in a 1976 conference at which the sharpesc controversy concerned the growth rate of machinery production. China specialists from U.S. government agencies and from American, British and Canadian universities had little trouble agreeing on overall trends. in GDP, agricultural output etc. See the forthcoming volume entitled Quantitative Heasures of China's Economic OutRut, edited by Alexander Eckstein and Robert F. Dernberger. 2. All quantitative statements in this chapter use the labor force and employment data based on the higher of the two sets of population data shown in Table 2.1. 3. Field (1975, p. 150) shows comparative growth rates for output of industry and of its consumer and producer components for various time periods. 4. Eeymann (1975, pp. 726-27) presents data on recent Chinese purchases of imported fertilizer plants. 173 References Aird, John S. 1968. "?opularion Grcwrh," in Economic Trends in Communist China, pp. 183-327. Edited Alexander ckstei, Walter Galanson and Ta-chung Liu. Chicago: Aldina. . 1974. 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